TNAG-1483-FCO40-2037-Economic-situation-in-Hong-Kong-1986 — Page 301

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Mr Thomas, HKD

Nive

C

I

tion

HONG KONG ECONOMY : TELNO EISER 2

Reference.......

I have no criticism of the analysis in the BTC, Hong Kong telegram under reference.

1.

2. The Hong Kong economy is always very sensitive to the growth in world trade and in 1985 that slowed significantly from 1984 levels. Hong Kong suffered accordingly. However Hong Kong should reap some benefits from its link to the US dollar in 1986. The link has effectively allowed the HK dollar to depreciate against the yen and European currencies thus improving its general competitiveness.

This will of course Financial

a tell against British exports to Hong Kong. Overall however

no very strong recovery is expected in World Trade in 1986 and unless Hong Kong can increase its world market share the outlook cannot be for strong externally generated growth.

CODE 18-77

AWO Ltd. 7/84

16 January 1986

Juc Rola

J M C Rollo

Economic Advisers

HRR 09012.

RECEIVED IN REGISTRY

20 JAN 1986

DESH OFFICER

PA

GISTRY

Action Taken

AB 29