C. a I. 35%
2700465
40x100-10/65-B45827
From: CANDIHONG, Hong Kong
To: GANDINGP&G,-Bryssets
HONGAID LONDON
Repeated to:—
Reneated to :--
My Reference
6th June, 1967
CR/LM/32/67
SAVINGRAM
CONFIDENTIAL
кои
its.
Gigammara
No..
156
220 A
A. Sedgwich gave me this copy, St- shat be requstered on
disturbancer
pr.
Con
Your Reference..
16+/6
Economic Consequences of the Recent Disturbancea
Enclosed for your information is a copy of a note recently
prepared by the Director for the Secretariat.
2.
Briefly, the disturbances did not involve any physical dazuge to the industrial economy; they did not affect labour productivity (but strike action and the threat of such action could have an unsettling effect in the future); there is, as yet, no real evidence of a withdrawal of buyers' intentiona(and where else can they go for cotton textiles given that access rights are a prerequisite to trade in this sector?); and, while there has undoubtedly been some movement of liquid fund, there is no evidence of disinvestment (and, again, access rights means we have captive industries and well as captive markets).
3.
So, all in all, it appears that only a long drawn out period of disorder is likely to damage the economy really seriously and our present expectation is that performance over the whole of this year, when the final figures are known, will not indicate auch slackening off in the growth movement without which this (resourceless) economy is likely to stalle
4.
One possible consequence of the recent disturbances and the present state of uncertainty (not mentioned by the Director) concerns our position in bilateral negotiations: although in the non-cotton textiles field we take au initial stand on our C.A.T.Ta rights and, 40 far as cotton textiles are concerned, we are a participant in the L.T,A., it is at least arguable that doubta about our continuing economic and political viability will rake it less likely that we shall be able to negotiate as fair a share of available access rights in the future as in the past. What do you think?
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