TNAG-1590-FCO40-2175-Appointment-of-Sir-David-Wilson-as-new-Governor-of-Hong-Kong-1987 — Page 62

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CONFIDENTIAL

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ANNOUNCEMENT OF NEW GOVERNOR: PRESS CONFERENCE, 16 JANUARY 1987

"BULL POINTS'

ECONOMY

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Domestic Exports rose by 13% in real terms in first nine months of

1986 over same period 1985. [Imports increased by 18%.]

Inflation was 3.9% in twelve months to end November 1986.

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GDP growth forecast at 6% 1986 over 1985

Unemployment 2.9%.

Capital Investment

Best available measure (imports of capital goods and retained

imports of plant and machinery) rose by 23% in real terms in first

nine months of 1986 over same period 1985.

288 overseas companies established a place of business in Hong Kong

in 1986, 25% up on 1985. Total number of overseas companies with

place of business in Hong Kong now 2,238. Total foreign investment

in HK manufacturing industry at end 85 (latest available)

HK$11.8 billion. 53% from US, 21% from Japan, about 7% from UK.

Budget

1982/83 deficit $3.5 billion.

1983/84

deficit $3 billion.

1984/85

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deficit $1.5 billion.

1985/86

surplus $1.4 million.

1986/87

Banking

forecast surplus $348 million (conservative estimate).

Eleven additional foreign banks granted licences to set up branches

in Hong Kong in 1986. 75% of the top 100 banks in the world are now

established in HK.

CONFIDENTIAL