TNAG-2468-FCO40-3592-Most-favoured-nation-status-for-China-Hong-Kong-interests-1992 — Page 92

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19. Jectin 301

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FRIDAY, SEPTEMBER 4, 1992

IMPACT OF U.S. RETALIATORY TRADE ACTION ASSESSED

THE SECRETARY FOR TRADE AND INDUSTRY, MR TH CHAU,

CHAU, TODAY (FRIDAY) RELEASED THE RESULTS OF THE GOVERNMENT'S ASSESSMENT OF THE IMPACT WHICH TRADE ACTION BY THE UNITED STATES AGAINST CHINA COULD HAVE ON HONG KONG.

MR CHAU SAID ALTHOUGH THE MARKET ACCESS TRADE TALKS WERE A BILATERAL ISSUE BETWEEN CHINA AND THE U.S., THERE WAS GREAT CONCERN IN HONG KONG ABOUT THE POSSIBLE ECONOMIC IMPACT OF ANY TRADE ACTION WHICH THE U.S. GOVERNMENT MIGHT TAKE.

"THE PRELIMINARY LIST OF PRODUCTS ON WHICH THE U.S. HAVE THREATENED TO RAISE TARIFFS COVERS A VERY WIDE RANGE OF OUR RE-EXPORT TRADE, MR CHAU SAID.

"OUR BROAD ESTIMATE IS THAT IF IMPLEMENTED TO THE FULL OUR TRADE, INCLUDING RELATED TRADE FLOWS, WOULD DROP BY HK$35

(US$4.5 BILLION) IN THE YEAR OF INCIDENCE.

"ARISING FROM THIS LOSS IN TRADE, THERE WOULD BE A AROUND 16,600 JOBS. THE GROWTH RATE OF OUR GDP WOULD ALSO ABOUT 0.7 OF A PERCENTAGE POINT, HE NOTED.

"

EXTENT,

BILLION

LOSS OF

DROP BY

"THE LONGER TERM KNOCK-ON EFFECTS, WHILE NOT READILY QUANTIFIABLE, ARE LIKELY TO BE MORE SERIOUS," HE SAID.

"THEY INCLUDE WEAKENING OF INVESTMENT INTERESTS BY HONG KONG AND FOREIGN COMPANIES IN CHINA, UNDERMINING OF HONG KONG'S ROLE AS A GATEWAY TO CHINA AND MAJOR ENTREPOT, AND REDUCING HONG KONG'S LONGER-TERM GROWTH POTENTIAL, HE ADDED.

"THE GOVERNMENT WILL BE CONVEYING THE RESULTS OF THE ANALYSIS

OF ECONOMIC IMPACT TO THE U.S. ADMINISTRATION.

"IT WILL ALSO CONTINUE TO EXPRESS HONG KONG'S CONCERNS TO BOTH THE U.S. AND CHINESE GOVERNMENTS," HE NOTED.

MR CHAU HOPED THAT BEFORE THE U.S. STATUTORY DEADLINE FOR TALKS EXPIRED ON OCTOBER 10, CHINA AND THE U.S. WOULD BE ABLE TO CONCLUDE MUTUALLY ACCEPTABLE AGREEMENT.