TNAG-0589-FCO40-722-Private-visits-of-leading-personalities-from-Hong-Kong-to-UK-1976 — Page 26

RESTRICTED

real wages and economic growth was zero.

4. The renewed demand in world markets in the spring of 1975, however, found Hong Kong in a favourable position and exporters were able to take advantage of this with such success that by the latter part of the year Hong Kong's exports showed an increase of 4% at constant prices over the year as a whole compared with 1974.

5. The economy has continued to recover in 1976 and should approach full capacity faster than expected. Indications of the present state of the economy are given by the following figures drawn from the Hong Kong half-yearly Economic Report published in early September:-

(a) The forecast of the increase in gross domestic product for 1976 was revised from 9% to 16% by the Financial Secretary at the beginning of September;

(b) The value of domestic exports from Hong Kong in the first six months of 1976 was 51% higher than the corresponding six months for 1975; Imports during the same period of 1976 were 39% higher in value than in the first half of 1975;

(c) The unemployment rate in March 1976 was 5.6% compared to 9.1% in September 1975 (and is now probably much lower);

(d) Increases in real wage rates amounted to 13-15% between March 1975 and March 1976.

(●) Consumer price indexes in the first half of 1976 showed very moderate increases (2~%) over the first half of 1975.

Line to Take

6. The Minister may wish to comment in general on the strong recovery of the Hong Kong economy.

RESTRICTED