TNAG-1646-FCO40-2293-Chinese-investment-in-Hong-Kong-1987 — Page 37

CONFIDENTIAL **

G.F. 326

2

3.

After having declined in the second half

of 1985 and in the first half of 1986, investment in

plant and machinery revived in the third quarter and

gathered momentum in the fourth quarter. The revival was particularly significant in the case of

industrial machinery for use in the manufacturing

sector. With regard to property, there was a very substantial increase in planned developments in

respect of commercial property in 1986. In line with improved investment intentions in the

manufacturing sector, planned developments in

industrial property also increased significantly.

Planned developments in residential property

increased in terms of floor area but decreased in

terms of numbers of units, as some developers

shifted to the development of larger flats during

the course of 1986. Comparing the fourth quarter of

1986 and 1986 as a whole with the same periods in

1985, completions of industrial and residential

buildings increased, while completions of commercial

premises declined. The demand for most types of property in the fourth quarter of 1986 remained generally firm, and the property market continued to

be active.

Investment in plant and machinery

4.

(a) Capital expenditure on plant and

machinery

Based on the preliminary estimates from

the quarterly GDP series (because of data

limitations quarterly estimates of GDP are produced

for internal reference only), overall capital

expenditure on plant and machinery (including

retained imports and local production) grew by 11%

CONFIDENTIAL #