TNAG-0434-FCO40-499-UK-interest-in-labour-and-social-affairs-of-Hong-Kong-1975 — Page 27

CONFIDENTIAL

Export Trade

4.

During the twelve month period to the end of June 1974 (the latest period for which detailed figures are available), Hong Kong's domestic exports increased, in quantitative terms, by an estimated 8%. This compares with an increase of about 3% over the corresponding period in 1972/73. The overall export results until June were therefore comparatively satisfactory. The latest indications are of increases in textile orders for delivery to Europe and the United States this winter, which appears to bear out the cautious optimism reflected in a recent survey of this important branch of Hong Kong's export industry

Conclusions

5.

This is a difficult time for Hong Kong, whose economy is totally dependent on export performance and the level of world trade. There is a real possibility of a sharp, though possibly short-lived, recession in the territory.

6.

Nevertheless, provided that global conditions do not deteriorate further, there is a prospect of some improvement in the industrial and manufacturing sectors by next spring. The grounds for this qualified optimism are to be found in Hong Kong's continuing industrial development and diversification, including the near-completion of important new chemical and marine engineering construction plants, both of which are due to come into production in 1975.

CONFIDENTIAL