TNAG-0761-FCO40-965-Budget-of-Hong-Kong--1978-1979-1978 — Page 48

PRIORITY

V CLAIR

FM HONG KONG 010850Z

UNCLASSIFIED

Akk 100 a :::

TA

* 1978

TOR COPY

INDEX

REGIS RY

TO PRIORITY F C O TELNO 241 OF 1 MARCH 1978.

INFO HONG KONG GOVERNMENT OFFICE LONDON, WASHINGTON (FOR CROWSON),

BRUSSELS (FOR BURGESS), GENEVA (FOR TSAO).

THE FINANCIAL SECRETARY, IN MOVING THE APPROPRIATION BILL FOR

1978 IN THE LEGISLATIVE COUNCIL THIS AFTERNOON, MADE INTER ALIA THE

FOLLOWING POINTS :

PART 1: HONG KONG'S ECONOMY IN THE 1970S

2. OUR EXPERIENCE OVER THE PERIOD 1961 TO 1977 INDICATES THAT

A BROAD CASUAL RELATIONSHIP EXISTS BETWEEN THE GROWTH RATE OF GDP

AND THE GROWTH RATE OF TOTAL EXPORTS: THE GDP GROWTH RATE IN ANY PARTICULAR YEAR DEPENDS ON THE GROWTH RATE OF EXPORTS IN THE

PREVIOUS YEAR AND THE CURRENT YEAR. BUT BETWEEN 1971 AND 1977

GDP GREW FASTER THEAN EXPORTS, SUGGESTING A GRADUAL SHIFT TO A

LESSER DEGREE OF DEPENDENCE ON EXPORTS.

3. IN TERMS OF ECONOMIC AND SOCIAL PROGRESS FOR THE INDIVIDUAL,

A GROWTH RATE OF 9 PERCENT PER ANNUM FOR GDP DURING 1971 TO 1977 IMPLIED AN ANNUAL GROWTH RATE OF GDP PER CAPITA OF 7.1 PERCENT PER ANNUM (WHICH COMPARES FAVOURABLY WITH 6.4 PERCENT FOR THE TEN

YEARS 1961 TO 1971). THE GROWTH OF GOVERNMENT CONSUMPTION EXPENDITURE AND GOVERNMENT EXPENDITURE ON FIXED CAPITAL FORMATION

WAS 9.4 PERCENT PER ANNUM AND ABOUT 20 PERCENT PER ANNUM RESPECTIVELY. THESE HIGH GROWTH RATES MEANT A RAPID INCREASE IN

INCOME IN KIND PROVIDED BY THE GOVERNMENT PARTICULARLY FOR THE LESS WELL-OFF, AS IS REFLECTED IN THE FOLLOWING SOCIAL SERVICES:

1

1971

1977

A. PERCENTAGE OF POPULATION

HOUSED IN PUBLIC HOUSING ESTATES

B. AIDED SECONDARY SCHOOL

37 PERCENT

41 PERCENT

PLACES

111,300

242,000

C. SOCIAL SECURITY PAYMENTS

DOLLARS

12.5MN.

(1971-72)

DOLLARS.

247MN. (1977-78)

140

AS