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across the border. And in any case they suspected that, as on earlier
occasions, the projected decline in the fiscal balance would turn out to have
been over-estimated. I said that the authorities would watch the inflationary
situation carefully, and would be prepared to act if necessary--for example if
the fiscal balance turns out to be worse than expected. They also stood ready
to take further supply side measures if needed--for example to increase
permitted labour imports or increase land supply.
12. I said that the new airport project was an essential infrastructure
investment for Hong Kong. Its construction would also considerably increase usable land supply in Hong Kong. It would be constructed using largely
imported labour and other resources, putting little direct strain on Hong Kong
resources. The return to the people of Hong Kong in the future, would be
great.
13. On trade, I said Hong Kong had been pressing hard for an early and
successful conclusion to the Uruguay Round. The Hong Kong economy was a
demonstration of benefits of multilateral free trade. Hong Kong attached.
particular importance to the proposals for improved GATT disputes' procedures.
And as the RED said, the authorities had become very concerned at what they
saw as abuse of anti-dumping procedures by some other countries with the
effect of harassing Hong Kong exporters.
14.
Finally. I commented that if the Hong Kong economic system were followed
more completely and more uniformly across China then I saw no reason why, over
time, the whole of China should not achieve the same economic success.
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