TNAG-0382-FCO40-428-Sterling-assets-and-balance-of-payments-of-Hong-Kong-1974 — Page 33

the Japanese whose prices are rising fairly fast.

UK EXPORTS UP

Our exports are increasing. In the first 5 months of 1973 they were up 12 compared with the second half of 1972. They were averaging £950 million i e HK$12,350 million per month. Our imports also rose by 7% to an average of £1,078 million (HK$14014 million) per month. This meant a larger than usual adverse visible balance. But this has to be set against the considerable, and often forgotten value of our invisible trade from shipping to insurance. They normally more than compensate for the persistent (and inevitable) trade deficit. And, of course, this is the case for Hong Kong also. We have also to remember that the imports the cost of which has been increased by the "devaluation" of Sterling include a large element for "fuelling" industrial production for export which should show in export figures later this year.

INDUSTRIAL RELATIONS

J

So much for prices and production. What about delivery performance. First I would say that although I recognise that it has in recent years left much to be desired, I believe that it has been painted much blacker than it honestly deserves. Some of our competitors commit equally disruptive delays with far less publicity and apparent reproach.

As you know the British Prime Minister is at present in the process of talks with the Trade Unions and the Confederation of British Industry about the next stage (Phase 3) of the battle against inflation which of course has a direct bearing on the prospects for industrial "peace" and, therefore, consistent production and reliable supply. So far the signs are that all sides are intent on finding a viable approach. We may not yet be entirely out of the wood but there is

7.

/a lot