TNAG-1766-FCO40-2520-Hong-Kong-Budget-Appropriation-Ordinance-1988-(No.-23-of-198-1988 — Page 38

10.

During the year our imports also increased rapidly in line with the strong growth in our economy. Overall our visible trade account in 1987 was roughly in balance (5). So although we have been maintaining trade surpluses with many of our major

markets we have used our export earnings to buy what we need from our major suppliers, with many of whom we run large trade deficits. We do not amass vast surpluses on our visible trade

account. We are free traders in the full sense of that term.

11.

draw particular attention to our visible trade

account and our large trade deficits with a number of economies

because our trade surpluses with some economies, particularly

the United States, have been cited as a reason

reason for changing the

linked exchange rate.

Our overall visible trade balance

provides no justification whatsoever for a change in the linked

rate, especially since a change would involve a revaluation of

the Hong Kong dollar against the currencies of trading partners

with whom we already have large visible trade deficits.

12.

In the light of the intense speculative pressure to which our exchange rate has been subjected from time to time, I wish to emphasize that the Government must have regard to the

long-term overall interests of Hong Kong and its community. The

linked rate system is

is a vital element of stability for Hong Kong; and it provides a mechanism for monetary control. I have

no intention of altering the current rate.

/13. The

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