TNAG-1373-FCO40-1819-Ministerial-visits-from-the-UK-to-Hong-Kong-1985 — Page 58

1986-87. The main areas of Government spending include social and community services (health, education, transport), security (defence, police, immigration) and

economic and general services (ports

(ports and airports and

administration).

14. In the short term domestic exports are expected to

rema in weak. However, the recent devaluation of the

dollar has already improved Hong Kong's competitiveness

in export markets and this should result in increased

demand for Hong Kong products, although this also depends upon improved demand in Hong Kong's major markets. Economic growth could also be put at risk by

the growing clamour for trade protectionist policies

particularly in the United States.

Despite the

expansion of trading links with China, Hong Kong's

economic dependence on the US economy market remains very important. Given that the Hong

Kong economy is smal 1 and the territory follows a policy of free trade, the rise in protectionism (see

below) is a source of great concern to the Hong Kong

Government.

as an export

15.

Although the Hong Kong Government's earlier forecast of 7.2% economic growth in the territory during 1985 is now unlikely to be achieved, the economy

is still expected

expected to grow by a healthy 4.5% during the

rate expected

of growth is disappointing but judged by the standards of the major manufacturing economies remains high.

year.

The fall in the

PROTECTIONISM

16.

Hong Kong's economy

Over

are

heavily dependent

external trade. In 1984, the total value of Hong

Kong's external trade was 179% of its gross

gross domestic

product.

90% of Hong Kong's manufacturing

products

exported and the manufacturing directly employs 34% of Hong Kong's

i s

on

sector

labour force.

The