TNAG-2127-FCO40-3037-Investment-in-Hong-Kong-1990 — Page 93

G.F. 326

CONFIDENTIAL #3

Report on Capital Investment in Hong Kong

First Quarter of 1990

Summary

Investment in plant and machinery remained

sluggish in the first quarter of 1990. Retained

imports of capital goods increased by about 3% in real

terms in the first quarter of 1990. over the same

quarter last year. The increase was due mainly to the

import of two aircrafts.

Excluding this item, there

was a decrease of about 11% in real terms. Over the

same period, retained imports of industrial machinery

for manufacturing use declined by about 15% in real

terms. The weak domestic export performance, the

slow-down in overall economic activity and the

situation in China all tended to affect investment

sentiment adversely.

2.

The property market became relatively less

active in the first quarter of 1990. Having revived

considably since late July last year, a degree of

consolidation can be expected. While, the demand for

small to medium-sized residential flats was sustained,

demand as well as prices and rentals for other types

of property soften during the first quarter.

CONFIDENTIAL ##