ENG-1973 — Page 53

INDUSTRY AND TRADE

Hong Kong Export Credit Insurance Corporation

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The corporation's function is to encourage and expand trade by protecting exporters against losses arising from a range of risks not normally covered by com- mercial insurers. In the performance of this function the security given to transactions by the corporation's insurance policies helps exporters to obtain finance. The corpora- tion's liabilities are guaranteed by the government.

Exports to 152 different markets throughout the world were insured during 1973. Following the pattern of Hong Kong's export trade, most of this business was with buyers in North America, Britain and Western Europe. However, support was also given to business with countries in Africa, South America, the Middle East, Asia and Australasia.

During the year the expansion in the corporation's business necessitated the authorisation of a further increase in the amount of the contingent liabilities which it is permitted under its ordinance to accept at any one time. By a resolution approved by the Legislative Council this authorised maximum liability amount was increased from $1,000 million to $1,250 million. This enabled the corporation to continue taking on more new business.

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In moving this resolution the Financial Secretary announced that he intended to introduce legislation to provide for an increase in the capital of the corporation. When the Hong Kong Export Credit Insurance Corporation Ordinance was enacted in 1966 the aggregate amount of capital was set at $10 million. This figure was based on a recommendation in the Freeman Report that the initial capital requirements of the corporation would be of the order of $10-$15 million against the total contingent liability to be assumed of $500 million. Since the contingent liability of the corporation had increased to almost $1,000 million it was considered prudent that the capital of the corporation should be increased.

Legislation to empower the corporation to issue unconditional guarantees to banks or other lending institutions is expected to be introduced at the same time. This measure is designed to facilitate the provision of finance to exporters of capital and semi-capital goods sold on medium terms of payment.

Hong Kong Productivity Council

The Hong Kong Productivity Council was established by statute in January 1967 to promote the increased productivity of industry in Hong Kong. The council com- prises a chairman and 20 members all appointed by the Governor, of whom 10 mem- bers represent management, labour, academic and professional interests; while the other 10 members represent government departments closely associated with produc- tivity matters.

The executive arm of the council is the Hong Kong Productivity Centre which was formally established on April 1, 1967. The centre co-ordinates the activities of persons and organisations engaged in the study and development of higher produc- tivity in industry. It also conducts training courses in productivity techniques, provides