TNAG-1267-FCO40-1616-Economic-situation-in-Hong-Kong-1983 — Page 150

AOF

HKK

090/4

RECEIVED IN REGISTRY

3- JAN 1984

REGISTRY

DESK OFFICER

INDEX

PA

Action Taken

Mr

Giffard

RESTRICTED

FROM: R D Clift

Hong Kong Department

DATE : 22 September 1983

CC:

PS/Mr Luce

Mr Donald o.r.

Mr Hallett, ESID

HONG KONG : HALF-YEAR ECONOMIC REVIEW BY FINANCIAL SECRETARY

22

1. On 16 September, Sir J Bremridge, the Hong Kong Financial Secretary, gave a speech to the Foreign Correspondents' Club in Hong Kong. In it he reviewed the performance of the Hong Kong economy

since his budget speech in February and updated some of the

forecasts he had made then.

2. The main points in Sir J Bremridge's speech were:

a)

b)

c)

d)

e)

f)

g)

h)

domestic exports for the first half of 1983 grew by 9% in real terms, and re-exports by 4%, over the same period in 1982;

consequently the visible trade gap narrowed from 14% to 12%; in such circumstances the depreciation of the Hong Kong dollar was clearly not principally due to economic factors;

he did not propose to abolish the 10% interest withholding tax on Hong Kong dollar deposits now, but would address the issue

again in the context of the 1984 budget;

the property sector was one area where there had been virtually

no signs of activity;

unemployment fell to 3.9% in May-July, only slightly above the level of effective full employment;

both revenue and expenditure in 1983/4 were likely to be lower than forecast, resulting in a deficit of the order provided

for;

the relative size of public sector should reduce to about 23%,

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