TNAG-0938-FCO40-1157-Visit-of-John-Nott--Secretary-of-State-for-Trade--to-Hong-Ko-1980 — Page 66

BRIEF 8

BRIEF FOR MINISTER FOR TRADE'S VISIT TO HONG KONG

30 AUGUST 5 SEPTEMBER 1980

THE HONG KONG ECONOMY

1

In

Since 1950 Hong Kong has been transformed from a trading

entrepot into a major industrial, financial and communications

centre, with one of the highest standards of living in Asia.

the virtual absence of natural resources, this success has been

largely due to capitalising on the advantages of a versatile and

industrious workforce, a highly developed and sophisticated

commercial structure, a generally favourable investment climate

and a consistent pursuit of free trade and economic policies.

2

The Government sees its major role as providing a stable

framwork in which private enterprises can function efficiently.

This includes for example, the formation of land, road construction

and the provision of a major social services programme, including

housing which has been set back by the last recession. Government

intervenes in economic processes only when very serious economic or

social developments occur; other than these, the private sector's

economic activities are neither protected nor subsidised.

3

Hong Kong has made an impressive recovery from the recession

of 1974-75, with very rapid economic growth (over 10% per annum)

during the past four years, based on a vigorous export sector and

a boom in domestic demand, and every year from 1976-1979 it recorded

double digit growth in Gross Domestic Product. The average for the

four years was 12.5%. This year growth is forecast to fall to

around 9%, but that is still up to the pre-1974 average at a time

when world growth rates are significantly below the 1974 levels.