TNAG-2594-FCO40-3782-Appointment-of-Chris-Patten-as-new-Governor-of-Hong-Kong--Ap-1992 — Page 25

VI ECONOMIC

HONG KONG ECONOMY

Economy performed well in 1991 (GDP growth of over 4%) and

is forecast to grow at some 5% in 1992. Trade with China

continues to boom.

-

Inflation remains a problem (at over 10% per annum) and Hong Kong Government is taking measures to combat it.

RENEWAL OF MFN STATUS FOR CHINA

- We take a close interest in this important issue for Hong Kong because two thirds of China's exports to US pass

through Hong Kong. Loss of MFN would cut Hong Kong's GDP

growth cut by a third to a half. 44,000-60,00 jobs lost.

-

Glad that China and the US have resolved some of their

trade differences. A good bilateral relationship will be

important in maintaining MFN status.

SISADR/9