TNAG-2625-FCO40-3816-Visit-by-Douglas-Hurd--Secretary-of-State-for-Foreign-and-Co-1992 — Page 86

16-JUL-1992 18:35

HK GOVERNMENT HOUSE

852 521 1868

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Hong Kong Economy

The growth momentum of the economy continues into 1992. Gross domestic product (GDP) is forecast to increase by 5% in real terms, compared with 4% in 1991. Continuing rapid growth in re-exports constitutes the main impetus to growth of the economy.

Domestic exports remain slack. But this should be viewed against the continuous structural shift from domestic exports to re-exports, along with the progressive extension of Hong Kong's manufacturing activities into South China.

Recording a total trade value of almost US$200 billion in 1991, Hong Kong ranked as the 10th largest trading economy in the world. With a per capita GDP of US$14,000 in 1991 (forecast to rise to US$16000 in 1992), Hong Kong enjoyed the second highest income among the non-oil producing economies in Asia.

4. Currently investment sentiment in Hong Kong is buoyant, as reflected in the rising expenditure on imported capital goods, property prices and stock market activities.

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Labour market remains tight and the local workforce is now fully employed. Virtual full employment is achieved against the background of rapid structural shift of the workforce from manufacturing to tertiary services. This is made possible by the flexibility of Hong Kong's labour market and adaptability of the local workforce.

Consumer price inflation has been on a downward trend recently. In May 1992, the year-on-year rate of increase moderated to 8.8% - a substantial drop from the peak of 13.9% in April last year. Optimistic that the official forecast of 9.5% for 1992 as a whole will be achieved.