TNAG-0847-FCO40-1057-Visits-of-Sir-Murray-MacLehose--Governor-of-Hong-Kong--to-th-1979 — Page 74

THE HONG 10 BOOMORY

UNCLASSIFIEL

ذا

1.

amufacturing is the major economic activity in Hong Zone,

accounting for hi of employi ent and 26. of total economic outį ut.

Trading activitio (including tourism, Lccount for 10, of employment

and 23% of output, financial and business services for 7. of employ-

ment and 20% of output, and construction for 7. of caployment and

6% of output. in 1970, the per capita Cur was 1,455, inflation Ex,

unemployment... and the average industrial wage hum 102 er month.

2. Les.ite ta pole economic base and underlying prosperity, the

MOI 101 ECOLORS D encountering certain roblem at the begining

of 1979. Iking. rosperity had led to increased contuler Bpcnding.

This, tupelit! with a tool in the construction industry, mad c:used

importa to ride blur 13 male divertim

export manufcctuling Stelar, ine vacible traut two

Werg TIGL. th.

in 1978, and the exchange rate of the The 101 doller tell. were

were indicat

tot & fully employed economy w... becoming over-

Leated, and inflationary pressures were building up.

3. In his budget for 1 introduced at the end of February, the

Hong Long Financial curetary proposed LeasuNCE to deal with these

problems: they included

ta

(i) & reduction in the rate of growth of government ca cnditure,

particularly on capital projects;

(ii) pl ded budget surpluses in viver to reduce the mülej su piy;

(iii) measured to reduce the credit-creatine potential of the

Government's own reserves; and

/(iv)