XN000022-1993-11-26 — Page 5

FRIDAY, NOVEMBER 26, 1993

THE

AS TO DOMESTIC EXPORTS, PERFORMANCE CONTINURD TO BE AFFECTED BY ON-GOING STRUCTURAL SHIFT IN THE COMPOSITION OF HONG KONG'S EXPORTS FROM DOMESTIC EXPORTS TO RE-EXPORTS.

ALONG

ADDITIONALLY, THE STRENGTHENING OF THE HONG KONG DOLLAR WITH THE U.S. DOLLAR EARLIER ON COULD HAVE WEAKENED THE PRICE COMPETITIVENESS OF HONG KONG'S PRODUCTS IN THE OVERSEAS MARKETS.

IN PARALLEL WITH TOTAL EXPORTS, IMPORTS ROSE BY ABOUT 16% IN REAL TERMS IN THE THIRD QUARTER OF 1993 OVER A YEAR EARLIER.

THE INCREASE WAS LIKEWISE LESS RAPID THAN IN THE EARLY PART OF THIS YEAR. IT ENCOMPASSED THE STILL SIGNIFICANT RISE IN RE-EXPORTS, BUT A MORE MODERATE GROWTH IN RETAINED IMPORTS, BY ABOUT 7% IN REAL TERMS IN THE THIRD QUARTER OVER A YEAR EARLIER.

A VISIBLE TRADE SURPLUS OF $1.3 BILLION, EQUIVALENT TO 0.5% OF THE VALUE OF IMPORTS, WAS RECORDED IN THE THIRD QUARTER OF THIS YEAR.

THIS COMPARES WITH A SURPLUS OF $2.1 BILLION, EQUIVALENT ΤΟ 0.9% OF THE VALUE OF IMPORTS, RECORDED IN THE SAME QUARTER LAST YEAR.

DOMESTIC DEMAND CONTINUED TO BE UNDERPINNED STEADY INCREASE IN CONSUMER SPENDING.

MAINLY BY THE

THE VOLUME OF RETAIL SALES ROSE BY ABOUT 6% IN THE THREE MONTHS ENDING AUGUST 1993 OVER A YEAR EARLIER. THE GROWTH RATE IN REAL TERMS OF PRIVATE CONSUMPTION EXPENDITURE SHOULD HAVE BEEN HIGHER THAN THIS IN THE THIRD QUARTER.

THIS WAS APPARENT FROM THE FACT THAT RETAINED IMPORTS OF CONSUMER GOODS GREW BY ABOUT 19% IN REAL TERMS IN THE THIRD QUARTER OVER A YEAR EARLIER, ALTHOUGH THERE COULD HAVE BEEN SOME BUILDING UP OF STOCKS DURING THAT PERIOD.

FIXED CAPITAL INVESTMENT CONTINUED TO SHOW A STEADY GROWTH IN OVERALL TERMS.

ALTHOUGH PRIVATE SECTOR BUILDING ACTIVITY REMAINED SLACK IN THE THIRD QUARTER, THERE WAS AN UPSURGE IN PUBLIC SECTOR BUILDING AND CONSTRUCTION ACTIVITY SUPPORTED BY THE ACCELERATED WORK ON A NUMBER OF MAJOR INFRASTRUCTURAL PROJECTS.

AS A RESULT, THE MARKED INCREASE IN OVERALL CONSTRUCTION ACTIVITY SHOULD HAVE ADEQUATELY OFFSET THE IN INVESTMENT IN MACHINERY AND EQUIPMENT.

BUILDING AND CONSOLIDATION

GOODS, BY

THERE WAS A DECLINE IN RETAINED IMPORTS OF CAPITAL ABOUT 2% IN REAL TERMS IN THE THIRD QUARTER OVER A YBAR EARLIER, FOLLOWING THE LARGE INCREASES FOR 12 CONSECUTIVE QUARTERS.

IN PARTICULAR, THE SLACK PERFORMANCE OF DOMESTIC EXPORTS MIGHT HAVE DAMPENED THE DEMAND FOR INDUSTRIAL MACHINERY AND EQUIPMENT.

THUS RETAINED IMPORTS OF MACHINERY FOR INDUSTRIAL USE ALSO FELL, BY ABOUT 2% IN REAL TERMS IN THE THIRD QUARTER, HAVING ALREADY DECREASED BY 6% IN THE SECOND QUARTER.

/RETAINED IMPORTS