TNAG-1221-FCO40-1531-Annual-address-by-Sir-Edward-Youde--Governor-of-Hong-Kong--t-1983 — Page 18

ECONOMIC AND FINANCIAL SITUATION:

DEVELOPMENTS SO FAR INDICATED THAT AN EXPORT-LED RECOVERY IS

UNDERWAY. DOMESTIC EXPORTS ARE EXPECTED TO GROW BY 11 PER CENT

IN REAL TERMS AND THE GDP BY FIVE AND A HALF SIX PER CENT IN 1983.

THIS IS VERY ENCOURAGING AND ILLUSTRATES THE RESILENCE OF HK'S

ECONOMY AND ITS ABILITY TO RESPOND QUICKLY TO A REVIVAL IN

DEMAND IN OUR MAJOR EXPORT MARKETS.

THE RATE OF INFLATION IS NOW JUST OVER 9 PER CENT PER

YEAR. THE RECENT SHARP FALL IN THE VALUE OF THE HK DOLLAR WILL

CONTINUE TO HAVE AN ADVERSE EFFECT ON THE RATE OF INFLATION FOR

THE REST OF THE YEAR. HK SHOULD CONTINUE TO BENEFIT FROM THE

·I-MPROVEMENTS OF THE WORLD'S ECONOMY WHICH ARE LIKELY TO CONTINUE.

THE GOVERNOR SAID HE WOULD NOT DEAL WITH THE QUESTION OF THE EXCHANGE

VALUE OF THE HK DOLLAR, BUT ADDED THAT IT IS AN ISSUE OF DAILY

ATTENTION AND CONSTANT CONCERN. THE ERRATIC FLUCTUATIONS OF

RECENT WEEKS DO NOT REFLECT THE ECONOMIC AND POLITICAL REALITIES

OF THE SITUATION NOR THE STRENGTHS OF HK'S ECONOMY AND SOCIETY.

PUBLIC FINANCES:

GOVERNMENT REVENUE SO FAR THIS YEAR HAS BEEN LOWER THAN EXPECTED

DUE MANLY TO THE DEPRESSED STATE OF THE PROPERTY MARKET AND THE

RESULTING SHORTFALL IN THE YIELDS FROM LAND SALES. IT IS LIKELY

THAT THE DEFICIT ON GENERAL REVENUE ACCOUNT WILL BE IN THE REGION

OF THE BUDGETTED DOLLARS 3.2 BILLION. THE GOVERNMENT INTENDS TO

CONTAIN ITS EXPENDITURE WITHIN THE BUDGETTED LIMIT OF DOLLARS

35.5 BILLON.

FINANCIAL AND COMMERCIAL SECTORS:

THE GOVERNMENT INTENDS TO RESTORE THE LONG-TERM VIABILITY OF HANG

LUNG BANK WHICH WAS TAKEN OVER BY THE GOVERNMENT LAST WEEK AND

IN DUE COURSE TO RETURN IT UNDER SOUND MANAGEMENT TO PRIVATE OWNERSHIP. THE GOVERNMENT WILL DRAW FROM THIS EXPERIENCE ANY

NECESSARY LESSONS FOR THE BETTER REGULATION OF HK'S BANKING

SYSTEM. THE GOVERNMENT IS NOW CONSULTING BUSINESS AND PROFESSIONAL ORGANISATIONS ABOUT THE PROPOSALS DRAWN UP BY THE SECURITIES

COMMISSION FOR REQUIRING THE DISCLOSURE OF SHAREHOLDINGS AND

DEALINGS. THE PROPOSALS HAVE BEEN APPROVED BY EXCO IN PRINCIPLE.

LEGISLATION IS BEING DRAFTED TO PROVIDE CONTROL FOR AND

REGULATION OF THE OUTBOUND TRAVEL BUSINESS THROUGH REGISTRATION

AND LICENSING. A BILL IS ALSO BEING DRAFTED TO PROVIDE A STATUTORY

FRAMEWORK FOR HIRE PURCHASE TRANSACTIONS.

TRADE AND INDUSTRY:

IF THE RECOVERY OF THE WORLD ECONOMY IS MAINTAINED, HK IS WELL PLACED TO TAKE ADVANTAGE OF THE RESULTING INCREASED OPPORTUNITIES FOR TRADE. FORTUNATELY FOR HK, THE 1982 GATT MINISTERIAL MEETING

REAFFIRMED THE SUPPORT OF GOVERNMENTS FOR AN OPEN TRADING SYSTEM

AS ESSENTIAL TO WORLD ECONOMIC RECOVERY. THE MEETING ALSO DECIDED

THAT GATT SECRETARIAT SHOULD CONDUCT AN URGENT STUDY OF THE PROBLEMS RELATING TO TRADE IN TEXTILES AND CLOTHING. ON INDUSTRY, THE GOVERNMENT HAS DECIDED TO AMALGAMATE THE INDUSTRY ADVISORY BOARD AND THE INDUSTRIAL DEVELOPMENT BOARD INTO A NEW INDUSTRY DEVELOPMENT BOARD. THE GOVERNMENT WILL CONTINUE TO SUPPORT OTHER STATUTORY

OR INDEPENDENT BODIES IN THIS FIELD.

FIELD 3.

THE