TNAG-1474-FCO40-2005-Visits-by-MPs-from-the-UK-to-Hong-Kong-1986 — Page 37

Land Commission

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8.

A Sino-British Land Commission has also been established

under the Joint Declaration, to discuss future arrangements for the

sale of land leases and other land matters of land administration.

It meets in Hong Kong. It has concentrated on technical matters and

on the form of land leases, and its achievements thus far have been

welcomed in Hong Kong, where a smooth pattern of land sales and

administration has been maintained.

Hong Kong Economy

9.

Despite several encouraging developments, the overall performance of the Hong Kong economy during 1985 was disappointing. Real GDP growth was under 1%, domestic exports declined by 5%, investment fell by 3% and imports grew by 6%.

10.

Against this background, a declining trend in domestic

exports stabilised towards the end of 1985 and since March 1986

positive year on year growth

growth has once again been reestablished. During the first six months of 1986, domestic exports were 8% higher in both real and money terms than in 1985 whilst re-exports rose by

1%.

Expectations that these rates of growth will not only be maintained but bettered during the second half of 1986 have resulted

in the budget forecast of 6% growth in total exports being revised

to 8%. The estimate for GDP growth in 1986 of 4.5% has also been

revised upwards to 5.6%.

11.

Exports apart the main economic indicators all suggest that

Hong Kong's economy is performing well. Recent land sales and share flotations have been more successful than expected and the Hang Seng Index (Stock Market) recently reached an all-time high and continues

to rise. The overall rate of inflation is expected to remain

around 3% whilst the unemployment rate at 3%, in effect full

employment, is also expected to remain constant.

Government

expenditure during the first half of the year has been close to the

budget estimate, whilst Government revenue has continued to grow. As a result the budget surplus in 1986-87 is likely to be greater than originally estimated.

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