TNAG-1951-FCO40-2779-British-capital-investment-in-Hong-Kong-1989 — Page 102

CONFIDENTIAL #3

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7.

(c) Retained imports of industrial

machinery for use in the

manufacturing sector

The growth rate of retained imports of

industrial machinery for manufacturing use in

the second quarter of 1989, at about 6%, was slightly lower than the increase of 7% recorded

in the first quarter. The corresponding growth

rate for 1988 as a whole was 19%. The marked

deceleration in growth in the first half of 1989

for this category of investment reflected the

cautious attitude adopted by local manufacturers

in the face of a slackening domestic export performance. In real terms, domestic exports grew by only about 4% in the first half of

1989. Investment intentions of manufacturers

were further weakened by the events in China,

but the full effect will take some time to be

reflected in the respective retained imports

figures.

8.

(d)

Retained imports of capital

goods other than for

manufacturing use

In view of the heterogeneous nature of

these retained imports, the changes in real terms are not sufficiently reliable to be quoted

publicly. The series is included merely to provide a rough indication of trend. Retained imports of capital goods other than for manufacturing use grew by about 7% in the second

quarter of 1989, representing a sharp

deceleration from the increase of 22% recorded

in the first quarter. The corresponding growth

rate for 1988 as a whole was 16% (Table 2).

CONFIDENTIAL * *