XN000022-1991-03-06 — Page 14

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WEDNESDAY, MARCH 6, 1991

THE STRUCTURAL

RECENT YEARS, ON WAGES AND

GIVEN THE SLOW GROWTH OF THE LABOUR FORCE AND SHIFT IN EMPLOYMENT FROM MANUFACTURING TO SERVICES IN SIR PIERS SAID THERE WAS CONTINUED UPWARD PRESSURE SALARIES, AND THE LABOUR MARKET REMAINED GENERALLY TIGHT NOTWITHSTANDING THE MODERATE ECONOMIC ACTIVITY.

"APART FROM HIGHER LABOUR COSTS, HIGHER

PRICES OF IMPORTS,

PARTICULARLY OIL PRODUCTS, HAVE ALSO ADDED TO THE COST OF LIVING.

"AFTER A SLIGHT EASING EARLIER IN THE YEAR, THE RATE OF INCREASE. IN THE CONSUMER PRICE INDEX (A) (CPI(A)] EDGED UP AGAIN INTO DOUBLE-DIGITS IN THE FOURTH QUARTER.

"FOR 1990 AS A WHOLE, THE CPI(A) ROSE BY AN AVERAGE OF 9.8 PER CENT, REGRETTABLY, TOO CLOSE TO THE INCREASE OF 10.1 PER CENT RECORDED IN 1989."

AS

FAR AS HONG KONG'S TRADE WAS CONCERNED, SIR PIERS SAID THE GROWTH RATE OF RE-EXPORTS PICKED UP STRONGLY DURING THE YEAR, MAINLY BECAUSE OF A REVIVAL IN RE-EXPORTS TO CHINA. THERE WAS ALSO A RAPID INCREASE IN RE-EXPORTS OF CHINA ORIGIN.

FOR 1990 AS A WHOLE, TOTAL RE-EXPORTS GREW BY 16 PER CENT IN REAL TERMS. MUCH OF THIS INCREASE WAS RELATED то THE CONTINUED EXPANSION IN OUTWARD PROCESSING ACTIVITIES ACROSS THE BORDER.

THE STRONG GROWTH IN RE-EXPORT'S LARGELY OFFSET THE WEAK PERFORMANCE OF DOMESTIC EXPORTS AND PROVIDED THE MAIN IMPETUS ΤΟ OVERALL EXPORT GROWTH.

INDEED, IN 1990 NEARLY TWO-THIRDS OF THE TERRITORY'S TOTAL EXPORTS WERE RE-EXPORTS; THIS CONTRASTED MARKEDLY WITH THE POSITION ONLY THREE YEARS AGO, WHEN THE PROPORTION WAS LESS THAN HALF, HE SAID.

SIR PIERS SAID DOMESTIC EXPORTS SHOWED VIRTUALLY ZERO GROWTH IN 1990, ALTHOUGH THERE WAS SOME IMPROVEMENT IN THE FOURTH QUARTER, PARTICULARLY IN RELATION TO EXPORTS TO CHINA AND GERMANY.

"THE GROWTH IN IMPORTS OF 11 PER CENT WAS MAINLY ASSOCIATED WITH THE RAPID GROWTH OF RE-EXPORTS OVER THE YEAR. BUT THERE WAS SOME REVIVAL IN RETAINED IMPORTS, IN LINE WITH AN IMPROVEMENT IN DOMESTIC DEMAND.

"FOLLOWING A DECLINE IN THE FIRST HALF OF THE YEAR, THE GROWTH RATE OF RETAINED IMPORTS INCREASED IN THE SECOND HALF,

"FOR 1990 AS A WHOLE, RETAINED IMPORTS ROSE BY SIX PER CENT, WHEREAS IN 1989 THERE HAD BEEN ALMOST NO GROWTH.

HE SAID.

"OVERALL, THE VISIBLE TRADE ACCOUNT WAS JUST ABOUT IN BALANCE,

AS REGARDS INVISIBLE TRADE, SIR PIERS SAID EXPORTS OF GREW BY SIX PER CENT AND IMPORTS OF SERVICES BY 10 PER CENT.

SERVICES

++

*APART FROM THE FURTHER INCREASE IN THERE WAS A SUBSTANTIAL RECOVERY IN TOURISM.

TRADE-RELATED

/"THE NUMBERS

SERVICES,