TNAG-1456-FCO40-1980-Future-of-Hong-Kong-annual-report-to-Parliament-on-Hong-Kong-1986 — Page 60

Trade relations

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51.

remains

Hong Kong's Longer term economic performance

dependent on external forces. The threat of protectionism in Hong

Kong's major export markets, particularly the United States, remains. While prospects for exports to China appear good in the

Longer term given China's modernisation programme, Hong Kong's domestic exports and re-exports to China have been affected by

tighter Chinese control on imports since April 1985.

52.

to

The Hong Kong Government will continue to make every effort counter protectionist pressures and to defend Hong Kong's trading interests. The past year has seen the satisfactory conclusion of several new agreements of vital importance to Hong Kong's textiles

These include the extension garments

of the

Multi-Fibre Arrangement until July 1991 and bilateral agreements textiles with the United States and with the European Community.

and

53.

industries.

A s from 23 April 1986 Hong Kong has been a separate contracting party to the General Agreement on Tariffs and Trade and, in that capacity, has supported the Launching of the Uruguay round of multilateral trade negotiations in November. In the forthcoming discussions Hong Kong willL lend particular support to efforts to bring about trade liberalisation and improved market

it has

considerable interest in negotiations on trade in services, a sector

of growing importance to the Hong Kong economy.

access:

(d)

Public Finances

54.

The Hong Kong Government budget returned to surplus in the

financial

1985/86 after year

three years of deficits. For the financial year 1986/87, higher yields from earnings and profits tax are expected, and the income from land sales will also be higher.

of present

trends

significant a

improvement

in

on the basis of

the

surplus is likely at the close of the current financial year. Nevertheless, the Hong Kong Government will continue to keep public

expenditure firmly

the

gross

sector,

control under

and

presently equivalent to

to contain

about 16%

of the size

the of

public domestic product. This will be achieved through prudent management

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