TNAG-0101-FCO40-137-Visits-from-members-of-the-Legislative-Council-of-Hong-Kong-1987 — Page 18

functions to establish priorities

in development, to provide inducements

for new industries and to discourage

over-expansion of existing ones.

(b) the Government should offer backing to

commercial banks to enable them to

extend long-term, fixed-period and

fixed-interest loans to industry, not

only for the modernisation of plant and

equipment but also for credit facilities

in boosting the export of capital goods.

Such backing is necessary because existing

labour-intensive industries are

standing on a knife-edge due to

competition from lower labour-cost

countries. More technologically

advanced industries requiring greater

capital investment are therefore

needed. Also, because of competition

in consumer goods from nearby countries,

it is necessary to change over to the

production of capital goods for the

purchase of which customers must be

offered long-term credit. (In the

Officials' reply to the Budget Debate

the Director of Commerce and Industry

said that the Government would be

studying the possibility of establishing

a loan institution specialising in

helping small-scale industry with

medium-term finance at fixed rates for

re-equipment).

(c) free primary education should be

in the Colony

introduced over a period of three to

five years.

/(a)

NOTHING TO BE WRITTEN IN THIS MARGIN