TNAG-0630-FCO40-778-Effect-of-GATT-Multi-Fibre-Arrangement-on-Hong-Kong-negotiat-1988 — Page 93

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RAMAS

INDL

BY NO. 51 :10.

30 SFP 77

TO IMMEDIATE F.C.O TELNO.979 OF 30 SEPTEMBER.

FOR STEWART FROM JEAFFRESON,

YOUR TELNO.744.

REGISTRY

201

213)

208

1. I MUST APOLOGISE THAT, OWING TO THE SPEED AT WHICH OUR MEMORANDUM OF 2ND SEPTEMBER WAS PREPARED AND THE NEED TO KEEP IT TO A MANAGEABLE LENGTH, THE REASONING LEADING TO THE CONCLUSION

THIS OMMISSION IN PARAGRAPH 5.1 WAS NOT (NOT) ADEQUATELY PRESENTED. WAS COMPOUNDED BY AN UNFORTUNATE TRANSCRIPTION ERROR WHICH RESULTED IN THE INCLUSION OF THE WORD ''DOMESTIC'' IN THE FIRST

LINE.

2. TO SPELL OUT OUR ARGUMENTS MORE FULLY, PARAGRAPH 5.1 SHOULD

HAVE OPENED :

5.1 HONG KONG'S DOMESTIC EXPORTS IN THE PAST TEN YEARS REPRESENT A FAIRLY CONSTANT PROPORTION (69 PERCENT PLUS OR MINUS 2 PERCENT EXCEPT DURING THE DISTURBANCES IN 1967) OF TOTAL EXPORTS OF GOODS AND SERVICES.

AS THE SIZE OF

HONG KONG'S TOTAL EXPORTS OF GOODS AND SERVICES IS ROUGHLY

EQUAL.

4 A

{

3. THERE IS NO NECESSARY ECONOMIC REASON WHY THERE SHOULD BE A ONE-FOR-ONE RELATIONSHIP BETWEEN THE GROWTH OF DOMESTIC EXPORTS AND THE GROWTH OF THE GDP. BUT WE DO BELIEVE THAT OUR GDP GROWTH- IS PROPELLED BY DOMESTIC EXPORTS, AND A RELATIONSHIP BETWEEN THEM HAS BEEN EMPIRICALLY DOCUMENTED, FROM 1968, WHEN THE QUANTUM INDEX OF OUR DOMESTIC EXPORTS WAS FIRST AVAILABLE, TO 1976, THE INDEX HAS INCREASED BY AN AVERAGE RATE OF 8.5 PERCENT A YEAR. GDP IN REAL TERMS INCREASED DURING THE SAME PERIOD BY 8.3 PERCENT

/AYEAR.

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