TNAG-2126-FCO40-3036-Investment-in-Hong-Kong-1990 — Page 59

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8.

Retained imports of industrial machinery for manufacturing use decreased substantially by about 243 in the fourth quarter, having declined by 13% in the third quarter. In the first and second

quarters of 1989, there were increases of 3% and 43

respectively. For 1989 as a whole, these retained

imports decreased by about 8%. In 1988, they rose by

188 (Table 2). This severe setback was in line with

the weak domestic export performance. The growth rate of domestic exports decelerated markedly, from 9% in 1988 to 6% in the first quarter and 2% in the

second quarter of 1989. In the third and fourth

quarters, declines of 13 and about 4% respectively

were recorded. Apart from reduced overseas demand

for Hong Kong's products, the political and economic situation in China had also made manufacturers more cautious with their plans for expansion of capacity.

There were also reports that industrial investment

was diversifying into South East Asia.

9.

(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 fell by 8% in

the third quarter and by about 208 in fourth quarter of 1989, while in the first and second quarters they

grew by 238 and 8% respectively. For 1989 as a

whole, there was a decline of about 1% in contrast

to a 17% growth in 1988 (Table 2).

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CONFIDENTIAL #