XN000022-1990-07-04 — Page 3

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WEDNESDAY, JULY 4, 1990

NEED TO SUSTAIN GROWTH MOMENTUM OF ECONOMY: SEM

THE GOVERNMENT'S AIM IN ALLOWING FURTHER IMPORTATION OF LABOUR IS FOUNDED UPON THE NEED TO SUSTAIN THE GROWTH MOMENTUM OF THE ECONOMY, THE SECRETARY FOR EDUCATION AND MANPOWER, THE HON K.Y. YEUNG, TOLD THE LEGISLATIVE COUNCIL TODAY (WEDNESDAY).

SPEAKING IN THE DEBATE ON THE MOTION CONCERNING IMPORTATION OF LABOUR, MR YEUNG SAID THE FORECAST TREND GROWTH RATE OF GROSS DOMESTIC PRODUCT (GDP) OF 5.5 PER CENT COULD BE PLACED IN JEOPARDY IF THE PRODUCTIVE CAPACITY OF OUR INDUSTRIES WAS CONSTRAINED BY THE MUCH SLOWER GROWTH RATE IN THE SUPPLY OF LABOUR.

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HE ALSO SAID THAT WITH THE BENEFIT OF THE EXPERIENCE GOVERNMENT HAD GAINED OVER THE PAST 12 MONTHS IN REGULATING IMPORTATION OF FOREIGN TECHNICIANS AND CRAFTSMEN, THE OPPORTUNITY BEEN TAKEN TO INTRODUCE TWO MEASURES THAT WOULD HAVE THE EFFECT OF SIMPLIFYING PROCEDURES AND SPEEDING UP DECISION-MAKING.

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AT THE OUTSET OF HIS SPEECH, IN WHICH HE SUPPORTED THE MR YEUNG SAID HE WELCOMED THE DEBATE PARTLY BECAUSE IT HELPED THE COMMUNITY TO FOCUS ATTENTION ON THIS IMPORTANT ISSUE AND PARTLY BECAUSE IT PROVIDED AN OPPORTUNITY TO OUTLINE THE THINKING BEHIND THE GOVERNMENT'S RECENT REVIEW OF ITS POLICY IN IMPORTING LABOUR.

HE SAID HONG KONG HAD SUSTAINED A SHORTAGE OF LABOUR FOR SOMETHING OVER FIVE YEARS.

AS FAR AS COULD BE ASCERTAINED FROM VARIOUS EMPLOYMENT SURVEYS UNDERTAKEN BY THE CENSUS AND STATISTICS DEPARTMENT, THE NUMBER OF VACANCIES ACROSS ALL INDUSTRIES HAD INCREASED STEADILY FROM 32,

,000 IN 1985, OR JUST UNDER ONE PER CENT OF ACTUAL EMPLOYMENT IN THAT YEAR, TO A PEAK OF 125,000 IN 1988, OR OVER FOUR PER CENT OF ACTUAL EMPLOYMENT IN THAT YEAR.

**WHILST THE NUMBER OF VACANCIES HAVE DECLINED IN 1989 TO 102,000, OR 3.6 PER CENT OF ACTUAL EMPLOYMENT, PRELIMINARY SURVEY RESULTS SHOW THAT THERE HAVE BEEN NO FURTHER DECLINES DURING THE FIRST QUARTER OF 1990," HE SAID.

AS TO HOW DAMAGING WAS THIS PHENOMENON, MR YEUNG SAID IN AN OPEN ECONOMY SUCH AS HONG KONG'S, THE UPWARD PRESSURE ON COSTS AND PRICES ARISING FROM AN EXCESS OF DEMAND FOR LABOUR SHOULD, IN THE SHORT TERM, HELP TO RESTRAIN DEMAND TO A LEVEL MORE COMMENSURATE WITH THE ECONOMY'S PRODUCTIVE CAPACITY.

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"AS THIS OCCURS, THE DEMAND FOR LABOUR SHOULD BECOME LESS INTENSE, HE SAID. "BUT IT IS NOW CLEAR FROM THE PERSISTENT RISE THE NUMBER OF VACANCIES OVER THE PAST FEW YEARS THAT THIS CONSTRAINT HAS NOT WORKED AND DEMAND HAS CONTINUED TO OUTSTRIP SUPPLY.

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