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8.
Although 10 hours a day is extremely inconvenient, it is
supportable, and I know we are all extremely anxious to avoid tighter
restrictions. At present we do not know what rain will fall during the
rest of the autumn and winter, nor do we know whether next summer's
rain will be early or late, or normal or abnormal. This is, therefore,
no time to take risks in so important a mattér, and unless there is
unusual rainfall in the autumn and winter, we will not relax present
restrictions. But the additional supplies from China will allow us to
relax them sooner than would otherwise have been the case once our
reservoirs have begun to fill up again next year.
Relations with China
9.
I should add that this gesture over water is characteristic
of the excellent state of Anglo/Chinese relations and of the practical and
sympathetic way in which matters of mutual concern to the Kwangtung
authorities and Hong Kong are being handled. This relationship is something
from which we can take confidence.
(2) Economic
The economy
10.
1976 was a year of quite extraordinary growth, now put at nearly
18% in real terms. The main impetus behind the growth was exports. All
our major industries benefited with the clothing industry having an
outstanding year. The distribution of the growth of exports among our
main markets was also fairly uniform.
11.
The advance in 1976 compensated for the two recession years of 1974
and 1975, just as it reflected the competitive edge gained during them.
As I said last year this unavoidable process of deflation hit our work
force hardest. But the rapid recovery since 1975 has brought a return to
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