ECONOMIC INTELLIGENCE WEEKLY REVIEW

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP80T00702A001000050001-4
• Release Decision: RIPPUB
• Original Classification: S
• Document Page Count: 55
• Document Creation Date: December 16, 2016
• Document Release Date: August 31, 2004
• Sequence Number: 1
• Publication Date: December 22, 1978
• Content Type: PERRPT

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ECONOMIC INTELLIGENCE WEEKLY REVIEW
22 December 1978
Current Survey ..................................................................................... 1
Major Recent Developments Affecting the International Economyl
European Community: The Long March Toward Increased Trade With
China
A spate of contracts, rumored deals, and negotiations on trade agree-
ments highlights the EC scramble to profit from Peking's stepped-up
procurement of Western machinery and technology.
Indonesia: Devaluation Designed To Help Exports
The 33-percent devaluation of the rupiah last month, whose timing took
the business community by surprise, is designed to facilitate rapid growth
In nonoil exports in the early 1980s.
Hong Kong: Facing an Uphill Battle on Export Growth
Blessed with a well-disciplined labor force and laissez-faire government
policies, Hong Kong has grown to be the leading LDC exporter of
manufactured goods-but it will have to hustle to maintain its position in
the face of protectionist barriers abroad and rising costs at home.
Notes .............................................................. ........................... 23
China Posts Strong Economic Growth in 1978
China Has Recovered From Tangshan Quake
USSR Scales Down Oil Production', Plan
Portugal Registers Current Accout Sur la _I
us
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Current Survey
MAJOR RECENT DEVELOPMENTS AFFECTING THE INTERNATIONAL
Impact of Higher Oil Prices
OPEC's decision to hike oil prices 14.5 percent by October 1979 (a 10-percent
boost year-over-year) will shave 0.2 percentage point from OECD GNP growth in
1979 and another 0.5 point in 1980, according to the CIA/OER linked econometric
model. Assuming no exchange rate changes or compensating fiscal or monetary
policies, the model generates the following impact of the OPEC price increase on
OECD countries:
Change in GNP (percent) .......................................................... -0.2
Change in consumer prices (percent) ...................................... 0.3
Change in trade balances (billion US $) .................................. -8.5
1980
-0.5
0.9
-T5
We now estimate that non-US OECD real growth in 1979 will be slightly more than 3
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Most non-OPEC oil exporters will push prices up about in line with the OPEC
schedule. Mexico has already announced that it will adopt the initial 4.5 percent
OPEC increase on 1 January.
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Iranian oil production is edging upward as some oil workers re
Output now hovers around 3 million b/
the government has begun entorcing Prime Minister Az ari s "no
work, no pay edict.
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US, West European, and Japanese business and government leaders continue to
beat a path to Peking hoping to improve their positions as suppliers of equipment and
technology for the Chinese modernization program.
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For the near term, Ohira will probably have to live with growing budget deficits.
Because the cabinet is less experienced in economic policymaking than the previous
group, it will need time to develop the details of its economic strategy. The fiscal year
1979 budget-already in the final stages of planning-will likely contain a 16-percent
boost in outlays, pushing Tokyo's deficit to 37 percent of expenditures.
A spate of contacts, rumored deals, and negotiations on trade agreements
highlights the European Community's scramble to profit from China's decision to turn
once again to Western suppliers for technology and equipment. The two-way flow of
commodities and cash, however, remains small. Increases implied in recent agree-
ments are on the order of 15 to 20 percent per year through the mid-1980s, a feasible
target starting from current low levels.
Except for the problems involved in sales of military equipment and nuclear
technology, constraints on increased EC-PRC trade are largely on the Chinese
side-primarily China's limited ability to pay for and absorb the goods offered. While
the PRC may now be willing to accept conventional foreign credits, the Chinese still
want to offset imports with exports of PRC commodities.
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For the Europeans, the key obstacle to meeting trade goals will be finding
suitable Chinese products at competitive prices. Soviet displeasure with growing EC-
PHC trade, and particularly with the prospect of Chinese arms purchases, may affect
E(: relations with both China and the USSR. The Europeans will consider the Soviet
angle, as well as US policy, in responding to Chinese requests for sensitive goods.
Although a turning point appears to have been reached, long and frustrating
negotiations loom for the West Europeans; regardless of the outcome, China will
remain a small market for European industry.
European Community: Trade With China'
Percent of Total
Exports Imports
1960...... ...... _... ...... ........._...__._.................._........... __..... ....... . 0.79 0.53
1970 ........... .. __......... ....... 0.41 0.30
1973....... _. _., .....__....... _.._ ....... ........ .......__._._ _._ 0.50 0.31
1974.. ...... _...._.... ....... _. _ ._ .......... ....... ....._..._....._ 0.35 0.29
197..5.. .._......_......... . ............ ......_........._.. ...... 0.48 0.27
1976 _ 0.41 0.28
1977 ..............__.._ 0.24 0.26
19782 ...... ........ ..... _.. _.......... .._ 0.39 0.26
1985' _ ......... .............. ... _.............. .. ..._...... __..... _ 2.0-2.5 2.0-2.5
Data include intra-EC trade. China's trade share excluding intra-EC trade would be about double the
percentage shown. Data cover all nine current EC members-Belgium, Denmark, France, Ireland, Italy,
Luxembourg, the Netherlands, the United Kingdom, and West Germany,
2 Data for the first half of the year.
Estimated.
The EC Commission has sole authority to set general rules for trade between
member states and outsiders. Commercial arrangements are left up to individual
member states whose bilateral accords cannot specify or eliminate quotas or provide
for preferential trading arrangements. In November 1974, the EC offered to negotiate
trade agreements with state-trading countries, including China. Following mutual
diplomatic recognition in 1975, the PRC responded favorably to the EC invitation. An
agreement was tentatively approved in September 1977 and formally signed in
Brussels in April 1978. The five-year, nonpreferential agreement contains (a) a weak
most-favored-nation clause; (b) a "balanced trade" clause, according to which the two
sides promise to make "best efforts" to expand trade at similar rates; (c) a safeguard
clause, which provides for "friendly consultations" in case of EC difficulties with
Chinese goods and which tacitly recognizes an EC right to apply specific restrictions if
difficulties persist; and (d) a clause designed to prevent PRC sales at prices well below
market levels.
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The agreement allows the EC to maintain its current restrictions on selected
Chinese goods while calling for the Community to liberalize imports from the PRC as
much as possible. For its part, Peking promises to take imports from the EC into
"favorable consideration," a promise hailed by the Europeans as a Chinese concession
not previously granted to any trading partner. The agreement also establishes a joint
EC-China Economic Commission to review progress in promoting trade. The initial
meeting of the Commission will be held in first half 1979.
1975 1976 1977 1978'
Exports Imports Exports Imports Exports Imports Exports Imports
(f.o.b. (c.i.f.) (f.o.b.) (c.i.f.) (f.o.b.) (c.i.f.) (f.o.b) (c.i.f.)
Total
7,180
7,395
7,265
6,010 7,95
5
7,100
10,000
10,000
Of w,ich:.. .
European Community
703
1,637
825
1,475 8
75
1,040
980
1,930
Japan ....
1,459
2,369
1,306
1,746 1,4
73,
2,036
1,590
2,880
Hong Kong and Macao Q
1,400
35
1,630
30 1,7
95
45
1,692
9
72 9
United States ... .......... .,.
158
334
202
149 2
03
188
285
615
Singapore .........
251
44
254
41 2
62
62
265
72
Communist Countries
USSR ............ .....
150
129
179
238 1
77
161
170
170
Eastern Europe
485
525
435
550 6
00
625
NA
NA
Far East' _....
540
200
460
160 4
20
210
NA
NA
Preliminary data.
s Including entrepot trade.
9 Hong Kong only.
North Korea, Mongolia, Vietnam; Cambodia, and Laos.
Exports from the European Community to China reached $1.4 billion (f.o.b.) in
1975 but by 1977 had fallen back below $1 billion. Even in 1975, however, exports to
China represented less than 0.5 percent of total exports by EC countries, or about 1
percent of sales outside the Community. China's share of imports by EC countries was
only about 0.3 percent. Both market shares were well below the levels of the early
1960s.
Over the past two years, a flurry of Chinese delegations has descended on
Western Europe. At each stop, the missions have looked, poked, and prodded, and
made various-sometimes overlapping or contradictory-promises to government and
business officials. Very few major contracts have been signed. Nevertheless, a quiet
but sharp increase in Chinese purchases has occurred. In the first half 1978, EC
shipments to China ran close to the total for all of last year. Over the full year, EC
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exports to China no doubt have broken the 1975 record. EC imports from China for
1978 have increased roughly 15 percent above the 1977 level.
Major European Traders
West Germany
The West Germans have been less active than their EC partners in obtaining an
all-encompassing trade agreement with China, possibly because West Germany
outsells the rest of its EC partners combined. Nevertheless, West Germany agreed in
November to begin discussions leading toward an economic cooperation agreement.
West Germany recently won the first major West European contract from the Chinese
since the post-Mao buying round began. It calls for a West German consortium to
provide approximately $4 billion in know-how and equipment to modernize the
Chinese coal mining and coal mining equipment industries. While financing details
still must be worked out, a West German bank consortium apparently will provide
credit with five- to 10-year terms. The West Germans have also signed contracts for
the construction of five petrochemical plants. A rumored $14 billion contract for West
German construction of an integrated steel complex will probably be split among
suppliers in several countries, including Japan and perhaps France, the United
Kingdom, and Italy. (C)
France's independent foreign policy stance makes Paris the obvious first point of
contact for the Chinese in Western Europe. As with Franco-Soviet ties, however, the
"special relationship" provides only limited trade advantages for France. Although at
the forefront in negotiations and publicity, the French consistently run a poor second
to West Germany when final contracts are signed and deliveries made.
In the current round of interest in Sino-European trade, France was the first to
obtain formal signature of a new bilateral trade agreement. The pact, signed in Peking
on 4 December 1978 by French Foreign Trade Minister Jean-Francois Deniau, calls
for total two-way trade of $13.5 billion in 1979-85. The agreement also stipulates that
"best efforts" be made to balance trade, and that France make available $6.75 billion
worth of credits for its exports, probably at interest rates of 7.25-7.50 percent. The
credits, reportedly repayable in 10 years, will be forthcoming only as contracts are
signed.
Specific sectors mentioned in the agreement as being of priority interest to the
Chinese include steel, electrical energy (nuclear, hydroelectric, and thermal), mining
research, hotels, port infrastructure, aviation, agricultural machinery, rail transport,
and oil. Projects listed as being in advanced stages of negotiations-and for which
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French firms will receive "preference" from Peking if all competitive and technical
considerations are equal-include a steel complex, a magnesium plant, a specialty
steels plant, a sugar refinery and an aluminum complex. The most publicized project
connected with the trade package is a Chinese commitment to purchase two nuclear
power plants, which would be built by. the French under US license. France has
pledged not to sell the plants until US approval is obtained. China is pushing for
French arms sales not spelled out in the agreement, particularly deliveries of antitank
missiles and possibly Mirage aircraft.
United Kingdom
A draft UK-China trade agreement was drawn up during Chinese Deputy
Premier Wang Chen's visit to the United Kingdom in November 1978. The draft
contains a target of $10 billion in total two-way trade during the period 1979-85. The
signing of the agreement is planned for Industry Minister Eric Varley's trip to Peking
in April 1979. The pact lists 12 sectors of key interests to the Chinese, largely
duplicating the French-Chinese list. One potential problem is that conclusion of the
agreement may hinge on a British decision to sell the vertical-takeoff Harrier aircraft;
the Soviets have expressed their strong objection to Harrier sales.
The full extent of British credits apparently is still being worked out. A
consortium of banks reportedly agreed on 6 December to lend the Bank of China a
total of $1.2 billion, with repayment in about five years and an interest rate of 7.25
percent. According to the press, the funding will work exactly like a standard buyer
credit, with the money released to the Bank of China and then to British companies as
sales are made. The credits will be guaranteed by the British Government.
Italy
Italian companies have a relatively long history of activity in China, particularly
in oil and petrochemical equipment sales. Italy was the first EC member to sign a
trade agreement with China, in 1971. That three-year agreement (a) contained a
general list of goods to be traded, (b) provided most-favored-nation treatment (with an
exception for EC obligations), and (c) established a joint commission to meet at least
once a year to review progress, No specific trade target was set.
The Italians are negotiating a new trade agreement with China which they hope
to conclude early next year. Given the French and British precedents, a target two-
way trade goal will probably be specified through 1985. One deal currently being
discussed with the Chinese would involve Fiat construction of a tractor plant. In the
longer term, Fiat hopes to participate in building a complex producing trucks and
diesel engines. The Italian state oil company, ENI, hopes to play a role in Chinese oil
development. Italy has already offered China a $1 billion line of credit; details have
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not been worked out and probably will not be decided until specific contract
negotiations are further advanced.
Sorting Out the Potential Market
A summation of current Chinese agreements and negotiations involves the danger
of double counting. The Chinese are adept at negotiating with several countries for the
same items at the same time. For example, aluminum and steel complexes head the
lists of potential contracts with both France and West Germany. France appears to
have the inside track on the initial aluminum contracts while, within Western Europe,
West Germany could be the first to supply steel equipment. Both the United Kingdom
and France hope to participate in coal modernization plans, but West Germany has
already won the lion's share of the early contracts in this field. France and Italy both
are confident of winning vehicle plant contracts, and all major EC countries are
bidding on oil development projects-areas in which the United States and Japan hold
sizable leads.
Even after allowing for double counting, China's 10-year modernization plan
(1976-85) could entail a substantial amount of business for all the large EC countries.
The plan lists 120 major projects, including 10 steel plant complexes, nine nonferrous
metal plants, eight coal fields, 10 new oil and gas fields, 30 electric powerplants, six
major railway networks and five major ports.
Compensation and Balanced Trade
Compensation and balanced trade are constant themes in talks with the Chinese.
Most negotiations commence with Chinese offers to pay for oil exploration and
equipment with crude oil, for coal mining equipment and technology with coal, and
so forth. Western Europe has responsed skeptically, questioning just how much China
has to offer. While China's crude oil reserves, for example, may be great, the
Europeans note that Chinese crude is not well suited to their refineries because of its
high paraffin content. In addition, Peking thus far refuses to discount its price to make
Chinese crude competitive with Arab oil that is closer to Europe. Italy and France
have agreed to buy small test shipments of Chinese crude and both have hinted at
larger purchases in the future. Italy has mentioned the possibility of taking up to
20,000 barrels per day in 1979. A truly significant increase in purchases, however,
depends on European refining results and Chinese price decisions.
Peking has naturally raised questions about increased West European imports of
Chinese manufactured goods and liberalization of Europe's tariff and quota restric-
tions on Chinese products. Despite the EC-China trade agreement, liberalization will
be slow in coming, particularly for textiles, a sector in which European firms are
already suffering from foreign competition, overcapacity, and high unemployment.
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The possibility of West European firms obtaining access to China's huge and
presumably low-cost labor force for subcontracting and assembly operations-some-
what along the lines of European arrangements with Taiwan, South Korea, and Hong
Kong-is being explored. Although the Chinese until now have disdained such
operations, associating them with colonialism and exploitation, these activities could
offset a growing share of the cost of Chinese purchases. In the meantime the People's
Republic has been able to maintain an overall balance of exports and imports even
while running large deficits with Japan and the EC because of its annual $1.6 billion
hard currency surplus with Hong Kong.
For many years China has adamantly refused to accept overt foreign credits.
Suppliers credits, euphemistically referred to as "deferred payments" by the Chinese,
have sometimes been used to finance plant purchases. The Chinese, however, have
now agreed to borrow openly from France and the United Kingdom. In addition, a
thinly disguised form of debt has operated fairly efficiently, whereby the Bank of
China has accepted foreign currency in interest-paying deposits and drawn on the
deposits to pay for imports. Although deposits have been limited to about one year, 2-5
year deposits are now being considered; 5-10 year credits of this type may result from
current contract and financing negotiations.
Just how far China will go in accepting standard commercial credits and other
financing schemes cannot be predicted. The Chinese have given conflicting signals on
the issue, probably because the PRC leadership is still formulating guidelines.
European bankers and government officials would prefer to use standard commercial
loans or lines of credit rather than the deposit scheme. With a regular line of credit,
European banks would have use of the funds until called upon by the Chinese, and
government guarantees would be easier to obtain. West European banks, businesses,
and governments nonetheless will be flexible on the financing issue, and few deals will
fall through because of credit problems.
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INDONESIA: DEVALUATION DESIGNED TO HELP EXPORTS
Indonesia's 33-percent devaluation of the rupiah last month is designed to pave
the way for the rapid growth of nonoil exports in the early 1980s. The timing of the
devaluation was a surprise to domestic businessmen and the international financial
community; it was dictated by the economy's current strong position and the
imminent unveiling of the next five-year development plan (1 April 19"d 9 to 31 March
1984). Jakarta's failure to have a complementary monetary and fiscal package in place
has raised concern among foreign observers that gains from the devaluation will be
dissipated through inflation. The Suharto government appears to have been caught
unprepared for the reaction by merchants who raised prices willy-nilly on domestic
products as well as on imported goods.
The Devaluation Package
Indonesia devalued the rupiah by 33 percent on 15 November and cut the
currency's link to the US dollar. Jakarta announced a "managed floating rate" of 625
rupiahs per dollar pegged to a basket of currencies of Indonesia's major trading
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partners. We do not know the details of the floating rate mechanism. The basket of
currencies used to adjust the rate probably includes at least the Japanese yen, the US
dollar, the West German mark, the British pound, and the French franc.
The timing of the devaluation was no doubt keyed to the economy's current good
performance. Indeed, no balance-of-payments crisis or other compelling reason for
devaluation was in evidence this year. The current account will probably be in surplus
by about $200 million in 1978 and foreign exchange reserves in October were
comfortably high at $2.8 billion. Government planners probably calculated that
Indonesia's economy at this time can readily absorb the shocks of a devaluation.
Growth in real output this year is 6 to 7 percent, about the same as 1977. Inflation
through October was running at an annual rate of about 5 percent, compared with 11
percent in 1977 and 20 percent in 1976. The record rice crop and large rice stocks
insure continued supplies of this basic food at a stable price. Finally, by acting now the
government gives its economists enough lead time to incorporate the effects of
devaluation into the upcoming development plan-Repelita III-which starts in April
Reaction to Devaluation
The Suharto government is being roundly criticized by the Indonesian press and
by opposition political, religious, swdent. and military leaders for letting matters get
out of hand since the devaluation.
technocrats, led by the able E conomic Minister, Widjojo Nitisastro, may have
underestimated the panicky reaction in the marketplace, but the absence of an in-
place postdevaluation control package probably stemmed largely from the need to
keep the devaluation secret. With secrecy preserved, the technocrats were able to
prevent currency speculation and stockpiling by merchants of imported goods
Although some of the public criticism is well founded, much reflects the
underlying tension between the government and increasingly vocal opposition ele-
ments, as well as between the civilian and military leaders vying for power within the
government.
Prices of both imported and domestic goods rose by 30 percent and more the
week following the devaluation but with no consistent trend between cities or even
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between similar goods in the same city. Since then, prices have softened in response to
a belated jawboning campaign by the government and the use of security forces to
discourage markups. To its credit, the government has been able to reduce the price
effects of devaluation for most low income consumers by maintaining subsidized
prices for rice and kerosene, critical commodities in the budget of the poor.
Policy Considerations
Indonesia needed a devaluation to restore competitiveness to its nonoil exports
and to lay the groundwork for the new five-year development plan. Since the last
devaluation in 1971, the rupiah has steadily lost purchasing power because of domestic
inflation averaging 20 percent annually between 1971 and 1977. This rate was much
higher than in Indonesia's major import supplier countries-Japan, the United States,
and West Germany. Indonesia's terms of trade may have declined by 20 percent in
the past 12 months because of the depreciation of the dollar to which the rupiah was
pegged. Moreover, Indonesia's export competitiveness relative to its ASEAN neighbors
had eroded both in traditional primary products such as minerals, timber, rubber,
palm oil, and other agricultural commodities and in simple manufactures.
From the technocrats' perspective, the devaluation should improve Indonesia's
export prospects and the trade balance at a critical turning point in the economy. They
have convinced President Suharto that Indonesia can no longer rely on foreign-
financed, capital-intensive development of infrastructure and extractive industries and
burgeoning oil revenues, which have fueled an average 8-percent annual output
growth over the past decade. In particular, oil exports, which constitute 65 percent of
export earnings and finance one-half of the government budget-are butting up
against a likely production plateau of 1.7 million b/d in the next few years while
domestic consumption of 300,000 b/d is growing 10 to 12 percent annually.
The economic planners in Jakarta are focusing on two major goals: (a) the
development of agriculture and manufacturing industries along labor-intensive lines,
in order to spread economic growth more widely among low income groups; and (b) a
major boost in nonoil exports to finance economic development and prevent erosion of
the current account balance. Their analysis sees increased dollar prices of foreign
goods discouraging expensive capital goods imports in deference to less expensive
production methods that can take advantage of the low-wage labor force of 56 million
people. The restoration of export competitiveness should readily boost foreign demand
for traditional agricultural exports and also textiles and other simple manufactures.
The technocrats envisage the devaluation creating additional employment opportuni-
ties by stimulating investment in resource processing and export manufacturing
industries. The devaluation may reduce by 15 to 25 percent the annual demand for
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imported consumer goods, most of which are consumed by middle and high income
purchasers.
Followup Measures
The future benefits of the devaluation depend in large measure on Jakarta's
willingness and effectiveness in carrying out other, complementary policies in coming
months. A resurgence of pre-1978 inflation rates, for example, would quickly erode
the benefits of devaluation. To curb price pressures, the government intends to
maintain credit ceilings on domestic banks and to exercise strict control over the
money supply-all the more important because the devaluation temptingly boosts the
rupiah contribution of oil export earnings to the government budget. Jakarta has yet to
announce a wage policy that both dampens at the outset (a) new demands for higher
wages to offset price increases, yet (b) provides a system of future gains to avoid a
decline in real wages. In particular, Jakarta has failed to formulate policies to mollify
influential senior military and civilian government workers whose retirement savings
have less purchasing power as a result of the devaluation.
The government will also have to rationalize the prices of goods produced by
state industries. For now, state enterprises have been instructed to hold the line on
prices as an example to others, which has led to the inevitable profiteering by private
merchants buying from state enterprises at low, predevaluation prices and selling at
higher, postdevaluation prices.
Jakarta must also address the repercussions of the devaluation on domestic and
foreign investment. Although the devaluation per se makes new foreign investment
cheaper, existing firms with outstanding foreign loans now face 50 percent higher
repayment costs. Foreign loans may have to be renegotiated if firms cannot raise
prices to cover some of these added costs, a course the government favors but one
which is being resisted by bankers. Jakarta has partly eased the profit squeeze by
lowering tariffs on many imported raw materials, especially those used in export
manufacturing. In the latter area, the government will also have to take measures to
assure that producers, rather than the ubiquitous middlemen and customs officials,
receive the bulk of increased export revenues. Finally, the devaluation must be
accompanied by an effective effort to reduce the numerous institutional obstacles to
I- I
The devaluation and its aftershocks are likely to fuel tensions between Indonesia's
civilian economic technocrats and the largely military government. President Suharto
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has restrained the military's demands for new equipment and better living conditions
during the past two five-year plans in deference to more economically productive
investment. The military may now seek to cash in on its previous sacrifice and on its
responsibility for the election victories of Suharto and his party in the 1977
parliamentary and 1978 presidential election campaigns. As a result, the generals will
probably assert their pent-up demands for a much larger slice of the budget in the
next few years, citing internal security problems in East Timor, Irian Jaya, Aceh, and
Kalimantan, as well as potential threats to Southeast Asia regional' security from
Vietnam and China.
Military leaders have long been jealous of Suharto's continued respect for the
technocrats, who laid the foundation for Indonesia's post-Sukarno recovery, and of the
technocrats' powerful advisory positions despite an absence of any political base. The
military will be quick to blame the technocrats for any real or imagined disruption
because of popular reaction to the devaluation and subsequent price increases. The
technocrats will also face inevitable criticism for any slowing of economic growth and
government revenues as a result of the expected softening of oil earnings and the
shifted focus of the government's development plans. That Suharto was willing at this
time to risk possibly destabilizing criticism suggests that for now the technocrats still
figure highly in his administration's economic policy formulation.
HONG KONG: FACING AN UPHILL BATTLE ON EXPORT GROWTH
Working with a well-disciplined labor force and uniquely laissez-faire govern-
ment policies, Hong Kong has grown to be the leading LDC exporter of manufactured
goods. In 1978, its foreign sales of manufactures will approach $11 billion and capture
an impressive 2.5-percent share of developed country imports of manufactures. This
performance is particularly remarkable considering that the Crown Colony extends
over a mere 1,036 square kilometers and musters a labor force of only two million.
Hong Kong will have to overcome some major hurdles to maintain its premier
position. Protectionist sentiment abroad is cutting into sales growth; fully one-half of
Hong Kong's exports are already subject to quantitative restrictions. At the same time,
the market for both skilled and unskilled labor in Hong Kong has tightened
appreciably. The government is maintaining a handsoff policy in the face of these
problems, in part because it expects Hong Kong to be the main beneficiary of
increased commercial relations between the PRC and the developed countries.
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Hong Kong: Commodity Export Trends
400
300
200
Other Manufactured Goods
400
300
200
fob____
0
Electrical Machinery
400
300
200
100
400
300 -- -- -
.............
200
100
Televisions, Radios, and Phonographs
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Export Performance
Hong Kong's manufactures exports have advanced at a rapid pace since 1970.
Foreign sales have climbed at an average annual rate of 21 percent, from $2.3 billion
in 1970 to $9.0 billion in 1977, and are expected to come in just under $11 billion this
year.
Hong Kong: Manufactured Exports, by Commodity
1970
Textiles, fabrics, yarn ..... _ ._..... ....... _.__....._.....,. _, .. _....
Metal manufactures _. .._. ........ ....................... ...
Diamonds _ .... .............
_.._
Machinery ..... _ ._ ................................... _ .................................
Electrical machinery, apparatus ...... _...._ .....................
Clothing ._.. .... ...... ....... ____....._.
Scientific instruments .... ........._........ ...................... ............
Televisions, radios, and phonographs
Other manufactured goods
100
275
6i
122
160
125
691)
107
755
Exports are concentrated in a few key product lines. This year the Colony will
? More than $3 billion worth of clothing. Hong Kong is tapping into the high
fashion market and has also taken the lead in denim exports.
? $900 million in textiles and woven fabrics, mainly woolens and cotton.
? $1.7 billion in toys and games. Hong Kong companies are among the
leaders in the high-growth video game market.
? $1.5 billion in consumer electronic items, such as hand calculators and
digital watches.
Hong Kong's businessmen have been especially adept at adjusting to changing
market situations. For the most part, they have been able to work around export
quotas on traditional textile and apparel lines by moving into higher-fashion markets.
The "made in Hong Kong" label is becoming synonymous with high-quality garments
produced at competitive prices. Hong Kong enterprises are now making such famous
labels as Givenchy, Cardin, Chemise la Coste, Yves St. Laurent, Halston, and Calvin
Klein.
8,972
338
825
247
277
924
728
2,986
703
635
2,037
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The Colony's firms have also been quick to capitalize on newly emerging
consumer markets. They have latched onto the digital watch craze, exports of watches
now amounting to more than $500 million annually. As the market for pocket
calculators became saturated, manufacturers upgraded their lines to more sophisticat-
ed and expensive printer calculators. So far, Hong Kong has bucked the trend of other
Asian countries to join the television assembly bandwagon, concentrating instead on
transistor radios and stereo systems.
Hong Kong is the leading LDC exporter of manufacturers to the OECD
countries. Last year exports of manufactures to these countries totaled $6.6 billion, 2.4
percent of OECD imports of these goods.
Hong Kong has captured an impressive 3.5-percent share of the US import
market for manufactures; annual sales of $3 billion make the United States the Crown
Colony's leading customer. It holds a dominant position (26 percent) of the US
imported clothing market, reflecting its role as a leading supplier of women's designer
clothes and higher priced men's suits and shirts. The Colony holds import market
shares in excess of 6 percent on such key items as textiles and fabrics (mainly cottons
and wools), scientific instruments, and communications equipment for the consumer
market.
Hong Kong has also done well in the EC market, with a 2.8-percent share * of
manufactures imports ($2.1 billion in 1977) when intra-EC trade is excluded. West
Germany and the United Kingdom took 85 percent of the Colony's manufactured
exports to the EC last year; clothing and textiles still account for 60 percent of Hong
Kong's manufactured exports to these two countries despite a pronounced loss in
market position. In contrast to fashion clothing sales to the United States, Hong Kong is
scoring its biggest successes in the jeans and denim market.
Hong Kong sells about $1 billion worth of manufactured goods annually in the
Pacific Basin; other LDC markets are very small. Singapore is the Colony's most
important Asian market, sales reaching nearly $370 million in 1977. Over half of these
* Hong Kong's market share in EC countries decreases considerably when intra-EC trade is taken into account,
dropping from 2.8 percent to 1.1 percent for manufactured imports.
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Hong Kong: Shares of Manufactures Import Markets in Selected Countries
United States
Textiles, fabrics, and yarn 3.9
=_`^ 7.2
5.6
2.7
Clothing 21.0
25.8
Scientific instruments 1.5
wr 7.1
TVs, radios, and phonographs 4.8
6.3
Japan Major OECD1,2
Textiles, fabrics, and yarn 2.2
Electrical machinery 1.5
Clothing 20.6
10.3
Scientific instruments 0.4
2.2
TVs, radios, and phonographs o.1
2.8
Other manufactured goods 5.1
1970
1977
1. Excludes intra-EC trade.
2. Including: The United States, Canada, Japan, the European Community, Sweden, Switzerland, Austria,
and Norway.
5 8075 1278
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Hong Kong: Selected Exports by Destination, 1977
United States Clothing
Japan US $2,986 Million
European Community 12.8%
Other Developed
OPEC
Non-OPEC LDCs
Other'
Electrical Machinery
US $728 Million
2.7%
d.~
18.8%
wwvii~A
Scientific Instruments
US $703 Million
US $825 Million
14.4%
Other Manufactured Goods
US $1,679 Million
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exports were goods incorporating Singapore raw materials or components and then re-
exported to Singapore. Hong Kong, for instance, buys camera and watch components
from Singapore and ships back the assembled units.
Hong Kong has had a difficult time penetrating the import market for
manufactures in Japan, where it holds less than a 2-percent share. Since 1970, the
value of shipments to Japan has grown at an average annual rate of only 7 percent.
Clothes and diamonds comprise most of these exports, each representing 10 percent of
Japan's imports of these items.
Competitive Strengths
Hong Kong's success as an exporter stems from a variety of competitive strengths.
The Colony has one of the world's best harbors and has developed an excellent
commercial and financial infrastructure. Its telephone system ranks second in Asia
only to Japan's, and the Kwai Chung container ship terminal is one of the largest and
most modern in the world. Although wage rates in the Colony average 20 percent
above those in other Asian LDCs, employers consider the workers a bargain because of
their productivity and dependability. No work stoppages of consequence have
occurred in Hong Kong since 1967-68, when the Colony was disturbed by the spillover
from the Cultural Revolution on the mainland. Hong Kong's literacy rate is high; the
Colony now provides six years of education for all students and plans to increase this to
nine years by 1980.
The government has consistently taken a laissez-faire attitude toward the
Colony's economic development-a policy stance attractive to foreign investors. Hong
Kong has no protective tariffs, subsidies, capital gains tax, or corporate income taxes.
Taxes on business profits are paid by the owners at a flat 17 percent of gross profits,
the lowest tax rate in Asia. Finally, the government has no restrictions on foreign
ownership.
The Colony's economic strengths have attracted a substantial inflow of foreign
investment. The US stake of $500 million accounts for half of foreign direct
investment in the Colony's manufacturing sector, with approximately 50 percent of
US investment centered in electronics. The combined American equity in real estate,
transportation, and oil storage depots probably exceeds the amount of US investment
in manufacturing.
Looking Ahead
Hong Kong faces some hurdles in the path of future export expansion. Protection-
ist pressure on its textile and clothing products is mounting. Recently tightened EC
textile quotas will hurt Hong Kong sales particularly.
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In addition, Hong Kong's perennial problem of labor shortages is getting worse,
despite an annual immigration of 50,000 mainland Chinese. Enterprises find it
practically impossible to hire unskilled labor, formerly the mainstay of Hong Kong's
export industries, and skilled laborers are in even shorter supply. Land costs are
becoming an increasing barrier to new foreign investment. To ease the situation, the
government is offering land at below market rents to prospective new industries.
Many observers feel Hong Kong will have to become more service oriented and
build on its close ties with the PRC to continue to prosper. The Colony maintains a
unique position as China's main source of hard currency earnings. The PRC now
enjoys annual hard currency earnings of more than $2 billion from the sale of goods
and services in Hong Kong, buying practically nothing in return. Recent moves by
Peking to liberalize its trade and investment are expanding ties with Hong Kong.
China has expressed interest in using pro-PRC Hong Kong businessmen as go-betweens
in setting up joint ventures with foreign companies in Hong Kong and Macao. The
PRC already has established several bank branches in the Colony, and loans from
these banks are important sources of capital for stepped-up investment by PRC
companies. The most recent ventures include a $20 million plant to assemble machine
tools for ex ort to the United States and Southeast Asia and a $10 million oil storage
facility
Notes
China Posts Strong Economic Growth in 1978
The economy of the People's Republic of China has continued to rebound
strongly this year from the political turmoil of 1976. GNP has grown by an estimated
10 to 11 percent, with industrial output up sharply, perhaps by 13 to 15 percent, and
agricultural output up moderately, by nearly 4 percent.
The growth rate in industry exceeded the "over 10-percent" average annual rate
planned for 1978-85. Steel spearheaded the industrial advance, output increasing by
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China: Economic Performance Indicators
1977
Preliminary
1978
Percent
Increase
Gross national product (billion 1977 US $) _...... ...... _--...
370
407-412
10-11
Population (million persons, midyear)
983
1,004
2
Per capita GNP (1977 US $) .... .__ .............. ...... ....__ ... ..
377
405-410
8-9
Agricultural output (index: 1957=100)
146
151
4
Grain (million tons) .............. ....___........._........... __ _..
286
295
3
Cotton (million tons) .... ...._.__.......... _........... ........ ...... ........
20
2.2
10
Industrial production (index: 1957=100) _.... .__...... _..._......
572
646-658
13-15
Raw coal (million tons) ..__ _........ ............... ....... ................
547
600
10
Crude oil (million b/d) ..___...... .._....... .........._.........._....
1.8
2.0
11
Crude steel (million tons) .......___........ _ ................_____-.....
24
31
29
Cement (million tons) .__.. _.......... _....._ ..................... ...... .....
56
62
11
Chemical fertilizer (million tons) ....... _____._. _
38
48
26
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29 percent, or by 7 million tons. Production of coal, cement, and chemical fertilizer
also rose substantially, as old capacity was more fully utilized; new capacity was
especially important in chemical fertilizer output.
The estimated output of 295 million tons of food grains-9 million tons above the
1977 level-is a record high. Peking put the early grain harvest at 10 million tons
above last year's; however, a severe drought in some rice-producing areas has probably
kept the late harvest at or below last year's level. The growth in agricultural
production as a whole was slightly less than the 4-percent to 5-percent annual rate
stipulated for 1978-85.
China Has Recovered From Tangshan Quake
Two years after the devasting earthquake that jolted Tangshan prefecture in
North China, the area is well on its way to recovery. Rapid reconstruction has brought
industrial output to prequake levels, and plans are being projected for construction of
a new city.
The earthquake (magnitude 8.2 on the Richter scale) * that rocked Tangshan on
28 July 1978 was one of the largest in world history. Besides enormous human loss-an
estimated one-quarter of a million died, and one million were injured-the heavy
physical damage made 1976 a poor kick-off year for the Fifth Five-Year Plan (1976-
The magnitude (M) measured on the Richter scale is a measurement of the energy released by an earthquake. The
scale is logarithmic. Thus M8 is 10 times as great as M7 and 100 times as great as M6.
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80). Men, machinery, and suppliers were quickly dispatched to the area to aid the
victims and to rebuild facilities at considerable cost to construction efforts elsewhere in
the economy.
The massive relief and reconstruction effort has cost over $10 billion to date;
another $5 billion or so is programmed for construction of a new extended Tangshan
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By January 1978, Chairman Hua claimed that Tangshan's coal mines and other
industrial production had recovered fully. Though he exaggerated-the prequake rate
probably was not achieved until July 1978-the thrust of his remarks was correct.
China, through sacrifice and impressive skill in mobilizing basic resources, has
managed a rapid recovery from a level of chaos seldom encountered in an
industrialized area anywhere in the world.
As part of its 1979 economic plan, the USSR has announced an oil production
target of 11,9 million b/d-a sizable reduction from the goal of 12.2 million b/d
revealed last year. The change in plans provides a further indication that production
may peak soon, perhaps as early as next year. Even if output continues to edge up in
1979-80, peak production probably will not rise much above 12 million b/d, 3 to 6
percent below the range set as the 1980 goal.
West Siberia has provided all of the growth in Soviet oil production in recent
years and is the only major region from which increases in output can be obtained
through the early 1980s. The supergiant Samatlor oilfield has accounted for a large
share of West Siberian and national output growth during the past five to six years, but
probably reached peak production at about 2.7 million b/d this year. Other large older
fields in West Siberia also have reached their peak and some are beginning to decline.
In the older Urals-Volga producing region serious production declines have already
begun and will continue to worsen.
Originally, 62 new smaller (and more costly) oilfields were to have been
developed during 1976-80 in West Siberia, but the number now has been reduced to
22 or 23. Serious infrastructure problems, such as the lack of roads, pipelines, and
electric power supply to these distant new fields, have hampered their exploitation.
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Portugal Registers Current Account Surplus
The Portuguese current account showed a $41 million surplus in third quarter
1978, the first quarterly surplus in four years. Improvements in trade, services, and
transfers all contributed to the turnaround. The current account for the year as a
whole is expected to post a deficit of $1.1 billion, compared with a 1977 deficit of $1.5
billion. The deficit in first half 1978 totaled $873 million, and fourth quarter imports
may approximate early 1978 levels because of large food purchases to offset the recent
harvest.
In the first nine months of 1978, exports were 18 percent above the same period
last year, while imports rose only 5 percent. Export growth was led by sales of
1st 2d 3d
Qtr Qtr Qtr'
Trade balance .......... _..___ .......__...._................. ....- -646 -676
Exports (f.o.b.) ........ _......... .__.._....... ._._ ................... ......... _. 559 589
Imports (f.o.b.) ............_....................... ................. ......... . 1,205 1,265
Net services .................... .._.__...... .. -93 -70
Transportation .... .___, ................ .._....__.___..._ -58 -54
Tourism ........................... ... _............... .... .................. ......... 52 73
Investment income ....._... _. ....._................................ ... -68 -70
Other ....... .........._ .__..__ . _...._..... ........... .._......... ........... -19 -19
Net transfers ....... _ ................_ _....... .._......_......... .__............ 288 324
Worker remittances ..... _.._........_.................. .._._..... _____. 294 356
Other ........... __.... ........-.. --- -6 -32
Current account balance ........................................................ -451 -422
-508
575
1,083
40
- 48
169
-68
-13
509
521
-12
41
processed foods, cork, textiles, and machinery. Most of the rise in imports was due to a
40-percent jump in crude oil purchases as the Sines oil refinery came on line; exports
of oil products have not risen correspondingly.
Tourism receipts through the third quarter were 9 percent higher than for all of
1977, in large part because repeated devaluations of the escudo have offset domestic
inflation. At the same time, worker remittances totaled about 10 percent above the
level for all of last year. Most of the rise was due to an 11-percent minimum wage hike
in France, where many Portuguese guest workers hold menial jobs, and to exchange
rate changes.
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Next 1 Page(s) In Document Exempt
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Secret
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Assessment
Center
Economic Indicators
Weekly Review
ER EI 78-051
22 December 1978
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This publication is prepared for the use of U.S. Government
officials. The format, coverage and contents of the publication are
designed to meet the specific requirements of those users. U.S.
Government officials may obtain additional copies of this document
directly or through liaison channels from the Central Intelligence
Agency.
Non-U.S. Government users may obtain this along with similar
CIA publications on a subscription basis by addressing inquiries to:
Document Expediting (DOCEX) Project
Exchange and Gift Division
Library of Congress
Washington, D.C. 20540
Non-U.S. Government users not interested in the DOCEX
Project subscription service may purchase reproductions of specific
publications on an individual basis from:
Photoduplication Service
Library of Congress
Washington, D.C. 20540
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1. The Economic Indicators Weekly Review provides up-to-date information
on changes in the domestic and external economic activities of the major non-
Communist developed countries. To the extent possible, the Economic Indicators
Weekly Review is updated from press ticker and Embassy reporting, so that the
results are made available to the reader weeks-or sometimes months-before receipt
of official statistical publications. US data are provided by US government agencies.
2. Source notes for the Economic Indicators Weekly Review are revised every
few months. The most recent date of publication of source notes is 16 February 1978.
Comments and queries regarding the Economic Indicators Weekly Review are
welcomed.
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 Fc# 9 t5?~ ~P i~ t~l ~3~~ ?P~9P94L~t Rs
BIG SIX
Industrial Production
140
130
INDEX: 1970=100, seasonally adjusted
Semilogarithmic Scale
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llncluding Japan, West Germany, France, the United Kingdom, Italy, and Canada. A-2
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Consumer Price Inflation Percent, seasonally adjusted, annual rate
Trade Balance
9.1
8.8
6.1
Billion US $, f.o.b., seasApally adjusted
Industrial
Production
Big Six
United States
Consumer Prices
Big Six
United States
AVERAGE ANNUAL
Percent Change GROWTH RATE SINCE
LATEST from Previous 1 Year 3 Months
MONTH Month 1970 Earlier Earlier2
Unemployment Rate
Big Five
United States
Trade Balance
Big Six
United States
3 Months
LATEST MONTH ~ Year Earlier Earlier
SEP 78 4.5 4.4 4.5
SAP 78 6.0 6.8 5.7
LATEST
MILLION CUMULATIVE (MILLION US $)
MONTH
US $ 1978
1977
Change
SEP 78
6,131 43,281
24,231
19,051
SEP 78
.-1,691 -22,667
-17,953
-4,714
2Average for latest 3 montAhi3i3 o eedt For e911A. T00702A001000050001-4 a annual r a.
A-3
Unclassified
578665 12-78
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VVN INDEX: 1970=100, seasonally y adjusted
West Germany
JAN APR JUL OCT JAN APR JUL OCT JAN APR JUL OCT JAN APR JUL OCT JAN APR JUL OCT JAN APR JUL OCT
1973 Appr2 l,f or Release 1 iy09/28 : CIAt jPP0T00702A0 W9050001-4 1978
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United Kingdom
APR JUL OCT JAN APR JUL OCT JAN APR JUL OCT
Percent AVERAGE ANNUAL
Change GROWTH RATE SINCE
from
LATEST Previous 1 Year 3 Months
MONTH Month 1970 Earlier Earlierl
Percent AVERAGE ANNUAL
Change GROWTH RATE SINCE
from
LATEST Previous 1 Year 3 Months
MONTH Month 1970 Earlier Earlierl
United States NOV 78 0.7 4.0 7.3 7.1 1 United Kingdom SEP 78 -1.1 0.5 0.3 1.3
Japan OCT 78 -0.2 4.01 8.1 5.2 Italy OCT 78 6.6 3.2 9.9 -10.6
West Germany SEP 78 0.8 2.2 2.6 12.0 Canada SEP 78 2.8 4.3 6.3 6.3
France OCT 78 0 3.0 4.1 4.3 6
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lAverage for latest 3 months compared with average for previous 3 months.
Unclassified
5/8666 12-78
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UNEMPLOYMENT RATE
United States
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United Kingdom
Italy (quarterly)
3
A labor force survey based on new definitions of economic activity sharply raised the official estimate of Italian unemployment in first quarter 1977. Data for earlier periods thus are not comparable.
Italian data are not seasonally adjusted.
APR JUL OCT JAN
1973
APR JUL OCT
1974
JAN APR JUL OCT
1975
APR JUL OCT JAN APR JUL OCT JAN APR JUL OCT
1 Year 3 Months
Earlier Earlier
United States
NOV 78
5,912
6,663
5,968
United Kingdom
NOV 78
1,339
1,430
1,392
Japan
SEP 78
1,330
1,120
1,310
Italy
78 111
1,658
1,692
1,455
West Germany
OCT 78
978
1,034
993
Canada
NOV 78
919
903
941
France
OCT 78
1,215
1,097
1,241
NOTE: Data are seasonally adjusted. Unemployment rates for France are estimated. The rates shown for Japan and Canada are
roughly comparable to US rates. For 1975-78, the rates for France and the United Kingdom should be increased by 5 percent and
15 percent respectively, and those for West Germany decreased by 20 percent to be roughly comparable with US rates. Beginning in
1977, Italian rates should be decreased by 50 percent to be roughly comparable to US rates.
Unclassified
578669 12-78
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CONSUMER PRICE INFLATION Percent, seasonally adjusted,
annual rater
United States
JAN APR JUL OCT JAN APR JUL OCT JAN APR JUL OCT JAN APR JUL OCT JAN APR JUL OCT JAN APR JUL OCT
1973 1974 1975 1976 1977 1978
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United Kingdom
4.7
Italy
35
30
25
20
15
15
10
JAN APR JUL OCT JAN APR JUL OCT JAN APR JUL OCT JAN APR JUL OCT JAN APR JUL OCT JAN APR JUL OCT
LATEST Previous 1970 1 Year 3 Months LATEST Previous 1970 1 Year 3 Months
MONTH Month Earlier Earlier2 MONTH Month Earlier Earlier2
United States OCT 78
`:. Japan SEP 78 -0.2
' 1. West Germany OCT 78 0
2Average for latest 3 months compared with average for previous 3 months, seasonally adjusted at annual rate.
i United Kingdom OCT 78 0.2 13.0 7.8 12.5
Unclassified
578667 12-78
Approved For Release 2004/09/28 : CIA-RDP80TOO702AO01000050001-4
A-9
 ' Approved For Release 2004/09/28
CfQPfAj@0702A001000050001-4
GNP
Constant Market Prices
Constant Prices
Average
Average
Annual Growth Rate Since
Annual Growth Rate Since
Percent Change
Percent Change
-
--
-
Latest
Latest
from Previous I Year Previous
from Previous
1 Year
3 Months
Quarter
Quarter 1970 Earlier Quarter
Month
Month
1970
Earlier
Earlier '
United States
Oct 78
- 1.1
3.3
0.7
6.8
United States 78 III
0.8 3.2 3.8 3.4
Japan
Jun 78
1.9
9.3
6.4
11.9
Japan 78 III
1.0 5.3 6.3 3.9
West Germany
Sep 78
0
2.7
5.0
3.3
West Germany 78 11
2.1 2.7 4.2 8.8
France
Jan 78
9.9
0
1.0
10.5
France 78 I
1.8 4.1 1.4 7.4
United Kingdom
Oct 78
0
1.2
6.6
2.8
United Kingdom 78 I
1.7 1.8 2.3 7.2
Italy
Jul 78
-7.0
2.9
3.0
28.3
Italy 78 I
2.0 2.8 -0.8 8.2
Canada
Sep 78
6.3
4.6
7.3
6
3
Canada 78 III
0.9 4.6 4.1 3.7
.
+ S wally adjusted
Seascnogy adjusted,
' Average for latest 3
months compared with average
for previous 3 months.
FIXED INVESTMENT
WAGES IN MANUFACTURING'
Nonresidential; constant
prices
Average
Annual Growth Rate Since
Average
Percent Change
Annual Growth Rate Since
Latest
from Previous
1 Year
3 Months
Percent Change
Period
Period
1970
Earlier
Earlier'
Latest
from Previous 1 Year - Previous
Quarter
Quarter 1970 Earlier Quarter
United States
Jul 78
1.2
7.6
7.6
6.8
United States 78 III
1.0 3.2 8.5 4.0
Japan
Aug 78
0
15.4
4.8
2.8
Japan 78 111
1.8 1.8 8.3 7.2
West Germany
78 II
1.7
8.8
4.2
7.1
West Germany 78 11
-0.5 1.2 7.8 -2.0
France
77 IV
3.1
14.1
12.0
12.9
France 77 IV
0.8 4.0 4.7 3.3
United Kingdom
Jun 78
0.1
16.3
20.5
84.0
United Kingdom 78 I
2.8 1.8 11.3 11.6
Italy
Aug 78
4.0
20.2
14.7
15.6
Italy 78 I
2.3 1.1 -19.6 9.4
Canada
Sep 78
1.2
10.8
6.7
10.7
Canada 78 III
3.2 6.5 5.9 13.6
' Hourly earnings (seasonally adjusted) for the United States, Japan, and Canada;
hourly wage
Seasonally adjusted.
rates for others. West German and
french data refer
to the begi
nning of the quarter.
'Average far latest 3
months compared with that for previous
3 months.
MONEY MARKET RATES
Percent Rate of Interest
1 Year
3 Months
I Month
Representative rates
Latest Date
Earlier
Earlier
Earlier
United States
Commercial paper
Dec 13 10.27
6.60
8.45
10.24
Japan
Call money
Dec 15 4.63
5.00
4.13
3.75
West Germany
Interbank loans (3 months)
Dec 13 4.07
4.15
3.69
3.76
France
Call money
Dec 15 6.75
9.38
7.00
7.13
United Kingdom
Sterling interbank loans (3 months)
Dec 13 12.25
6.71
9.18
12.18
Canada
Finance paper
Dec 13 10.38
7.31
9.05
10.36
Eurodollars
Three-month deposits
Dec 13 11.33
7.11
9.09
11.70
 EXPORT PRICEApproved For Release 2004/09/28 :
ChkjWl?8AT 702A001000050001-4
US $
National Currency
Average
Average
Annual
Growth Rate Since
Annual Growth Rate Since
Percent Change
Percent Change
Latest from Previous
1 Year
3 Months
Latest from Previous I Year
3 Months
Month Month
1970
Earlier
Earlier
Month Month 1970 Earlier
Earlier
United States
Aug 78 1.3
9.7
11.0
19.5
United States Aug 78 1.3 9.7 11.0
19.5
Japan
Oct 78 3.9
12.0
28.8
25.2
Japan Oct 78 0.4 3.3 -7.3
-11.0
West Germany
Sep 78 1.5
11.8
17.9
22.5
West Germany Sep 78 0.1 3.7 -0.1
-2.3
France
Jul 78 4.2
11.9
16.5
16.5
France Jul 78 1.0 8.9 6.6
2.2
United Kingdom
Oct 78 2.8
12.5
22.2
36.3
United Kingdom Oct 78 0.3 14.9 7.7
8.2
Italy
Aug 78 2.6
11.4
10.9
28.2
Italy Aug 78 2.6 15.4 5.2
9.5
Canada
Sep 78 -4.7
8.0
0
-1.2
Canada Sep 78 -2.5 9.4 8.6
17.0
IMPORT PRICES
OFFICIAL RESERVES
,National Currency
Average
Billion US
$
Annual
Growth Rate Since
Latest Month
Percent Change
Eaten from Previous
1 Year
3 Months
1 Year
3 Months
End of Billion US S Jun 1970 Earlier
Earlier
Month Month
1970
Earlier
Earlier
United States
Aug 78 0.6
12.7
7.9
3.3
United States Nov 78 18.0 14.5 19.2
18.8
Japan
Oct 78 0.1
5.0
-21.8
- 18.6
Japan Oct 78 29.4 4.1 19.6
29.3
West Germany
Sep 78 -1.2
3.2
-2.3
7.4
West Germany Sep 78 44.7 8.8 34.5
40.7
France
Jul 78 -2.3
8.7
-2.1
-9.0
France Apr 78 10.6 4.4 10.0
10.2
United Kingdom Sep 78 17.6 2.8 17.3
17.3
United Kingdom
Oct 78 0.5
17.0
4.1
5.2
Italy
Aug 78 0.8
18.4
1.8
1.3
Italy Oct 78 14.1 4.7 11.1
13.5
Canada
Sep 78 -0.9
9.6
13.1
13.8
Canada Nov 78 4.5 9.1 4.2
4.2
CURRENT ACCOUNT BALANCE '
BASIC BALANCE '
Current and Long-Term Capital Transactions
Cumulat
ive (Million US
S)
Latest
Cumulative (Million
US S)
Period Million US $
1978
1977
Change
Latest -
Period Miion US $ 1978 1977
Change
United States 2
78 III -3,824 -
13,784 -13,085
-699
United States No longer published'
Japan
Oct 78 400
14,354
7,798
6,556
Japan Oct 78 -1,200 5,490 5,129
361
West Germany
Sep 78 597
3,382
275
3,107
West Germany Sep 78 1,689 3,480 -4,496
7,976
France
78 I -84
-84
-1,628
1,543
France 78 1 -863 -863 -1,889
1,025
United Kingdom
78 II 592
-235
-1,500
1,264
United Kingdom 78 II 765 444 1,771
-1,326
Italy
78 I 288
288
-1,025
1,313
Italy 77 III 2,427 N.A. N.A.
N.A.
Canada
78 II -1,201 -2,381
-2,658
277
Canada 78 II 883 327 -482
809
Converted to US dollars at the current market rates of exchange.
Converted to US dollars at the current market rates of exchange.
' As recommended by the Advisory Committee on the Presentation of Balance
of Payments
' Seasonally adjusted.
Statistics, the Deportment of Commerce no longer publishes a basic balance.
EXCHANGE RATES
TRADE-WEIGHTED EXCHANGE RATES'
Spot Rate
As of 15 Dec 78
As of 15 Dec 78
-
Percent Charge from
Percent Change from
US $
1 Year
3 Months
1 Year 3 Months
Per Unit 19 Mar 73
Earlier
Earlier
8 Dec 78
19 Mar 73 Earlier Earlier 8
Dec 78
Japan (yen)
0.0051 33.62
23.41
-4.26
1.37
United States -2.24 -5.61 0.88 -0.35
West Germany
0.5280 48.53
15.63
3.14
0.98
Japan 37.24 21.11 -4.03
1.23
(Deutsche mark)
West Germany 35.47 4.55 2.84
0.32
France (franc)
0.2302 3.74
11.35
0.60
1.12
France -10.54 -0.35 -0.30
0.42
United Kingdom
1.9795 -19.94
8.11
0.49
0.99
United Kingdom -28.12 -0.46 -0.45
0.86
(pound sterling)
Italy -44.05 - 6.90 -3.28 -0.71
Italy (lira)
0.0012 -32.86
3.87
-2.31
0.08
Canada -16.99 - 9.90 -0.47 -0.66
Canada (dollar)
0.8458 -15.70
-7.46
-0.67
-0.49
to
Wei tirg is
rr
h
~ ~kma~
O
O
O0
Approved For Release 2004/09/28:
I
en
cies
0T.2A0(Jh4nO
Q
1
~'O
cu
 Approved For Release 2004/09/28 : CIA-RDP80T00702AO01000050001-4
Big Other Com-
World Seven OECD OPEC munist Other
UNITED STATES
1975 .......................... 107.59 46.93 16.25 10.77 3.37 30.27
1976 .......................... 115.01 51.30 17.67 12.57 3.64 29.82
1977 .......................... 120.17 53.92 18.54 14.02 2.72 30.97
1978
1st Qtr ................ 30.96 13.65 4.60 3.76 1.00 7.95
2d Qtr ................ 37.05 16.14 5.25 4.43 1.44 9.79
Jul .......................... 10.94 4.51 1.51 1.38 0.40 3.14
Aug ........................ 11.61 4.95 1.65 1.32 0.37 3.33
JAPAN
1975 .......................... 55.73 16.56 6.07 8.42 5.17 19.52
1976 .......................... 67.32 22.61 8.59 9.27 4.94 21.91
1977._ ....................... 81.12 28.03 9.72 12.03 5.33 26.01
1978
1st Qtr ................ 22.11 7.79 2.43 3.35 1.32 7.22
2d Qtr ................ 24.07 8.60 2.44 3.55 1.74 7.74
Jul .......................... 8.58 2.99 1.02 1.33 0.51 2.73
Aug ........................ 8.18 2.94 0.86 1.19 0.58 2.60
WEST GERMANY
1975 .......................... 90.11 28.33 36.44 6.78 7.21 11.33
1976 .......................... 101.93 33.44 41.86 8.25 7.02 11.36
1977 .......................... 118.01 39.00 48.01 10.78 7.30 12.92
1978
1st Qtr ................ 32.45 11.17 13.05 2.76 1.97 3.49
2d Qtr ................ 34.69 11.94 13.71 3.01 2.26 3.77
Jul .......................... 10.42 3.64 3.93 1.01 0.65 1.18
Aug ........................ 10.99 3.38 4.57 1.01 0.71 1.32
FRANCE
1975 .......................... 53.03 20.01 15.50 4.90 3.13 9.50
1976 .......................... 57.05 22.49 16.15 5.08 3.23 10.10
1977 .......................... 64.86 25.90 18.18 5.96 2.99 11.82
1978
1st Qtr ................ 18.49 7.66 5.07 1.57 0.66 3.53
2d Qtr ................ 20.36 8.31 5.60 1.70 0.84 3.91
Jul .......................... 6.66 2.78 1.72 0.59 0.27 1.29
Aug ........................ 4.86 1.92 1.25 0.46 0.24 1.00
UNITED KINGDOM
1975 .......................... 44.46 12.54 16.59 4.55 1.56 9.21
1976 .......................... 46.56 14.03 17.53 5.13 1.39 8.48
1977 .......................... 58.04 17.29 22.20 6.77 1.63 10.14
1978
1st Qtr ................ 16.86 5.09 6.27 2.03 0.55 2.92
2d Qtr ................ 17.60 5.38 6.59 2.20 0.51 2.92
Jul .......................... 5.80 1.84 2.10 0.71 0.16 1.00
Aug ........................ 5.77 1.73 2.18 0.69 0.15 1.02
ITALY
1975 .......................... 34.84 15.61 7.86 3.72 2.46 5.19
1976 .......................... 37.25 17.58 8.73 4.27 2.18 4.48
1977 .......................... 45.04 20.91 10.20 5.84 2.46 5.64
1978
1st Qtr ................ 10.80 5.22 2.40 1.37 0.48 1.33
2d Qtr ................ 13.65 6.51 2.92 1.81 0.66 1.75
Jul .......................... 4.46 2.17 0.93 0.57 0.22 0.57
CANADA
1975 .......................... 34.07 26.30 1.72 0.71 1.20 4.14
1976 .......................... 40.52 32.01 2.03 0.81 1.25 4.40
1977 .......................... 43.08 34.83 2.20 1.17 1.08 3.80
1978
1st Qtr ................ 10.87 8.88 0.45 0.23 0.22 1.10
2d Qtr ................ 12.66 10.32 0.56 0.23 0.36 1.19
Jul .......................... 3.53 2.81 0.13 0.08 0.15 0.36
' Source: International Monetary Fund, Direction of Trade.
Unclassified A-12
Approved For Release 2004/09/28 : CIA-RDP80TOO702AO01000050001-4
 Approved For Release 2004/09/28 : CIA-RDP80T00702AO01000050001-4
UNITED STATES
1975 ..........................
1976 ..........................
1977 ..........................
1978
1st Qtr ................
2d Qtr ................
Jul ..........................
Aug ........................
JAPAN
1975 ..........................
1976 ..........................
1977 ..........................
1978
1st Qtr
2d Qtr ................
Jul ..........................
Aug ........................
WEST GERMANY
1975 ..........................
1976 ..........................
1977 ..........................
1978
1st Qtr ................
2d Qtr ................
Jul ..........................
Aug ........................
FRANCE
1975 ..........................
1976 ..........................
1977 ..........................
1978
1st Qtr ................
2d Qtr ................
Jul ..........................
Aug ........................
UNITED KINGDOM
1975 ..........................
1976 ..........................
1977 ..........................
1978
1st Qtr ................
2d Qtr ................
Jul ..........................
Aug ........................
ITALY
1975 ..........................
1976 ..........................
1977 ..........................
1978
let Qtr ................
2d Qtr ................
Jul ..........................
CANADA
1975 ..........................
1976 ..........................
1977 ..........................
1978
1st Qtr ................
2d Qtr ................
Jul ..........................
World
Big
Seven
Other
OECD
OPEC
Com-
munist
Other
103.42
49.81
8.83
18.70
0.98
25.09
129.57
60.39
9.75
27.17
1.16
31.10
156.71
70.48
11.09
35.45
1.23
38.47
43.14
20.39
3.51
8.15
0.47
10.62
45.99
22.53
3.68
7.90
0.48
11.40
15.67
7.56
1.29
2.62
0.14
4.04
14.96
6.92
1.11
2.91
0.19
3.83
57.85
16.93
6.08
19.40
3.36
12.07
64.89
17.58
7.78
21.88
2.91
14.73
71.32
18.88
7.92
24.33
3.41
16.79
18.32
5.04
2.06
6.46
0.86
3.89
19.39
5.51
2.30
5.95
1.01
4.63
6.47
1.95
0.80
1.82
0.30
1.60
6.92
2.17
0.81
1.92
0.32
1.70
74.92
27.09
27.78
8.24
3.51
8.30
88.14
31.28
32.64
9.73
4.38
10.11
101.42
36.39
37.37
10.12
4.92
12.61
28.24
10.11
10.88
2.32
1.39
3.55
29.75
11.10
11.43
2.24
1.40
3.58
9.57
3.60
3.48
0.77
0.54
1.18
9.43
3.41
3.51
0.82
0.50
1.19
53.99
23.04
14.33
9.43
1.94
5.24
64.38
27.81
16.93
11.36
2.24
6.04
70.49
30.28
18.24
11.81
2.46
7.69
19.76
8.58
5.40
3.05
0.64
2.09
20.42
9.16
5.62
2.77
0.68
2.19
6.31
2.88
1.65
0.94
0.23
0.61
5.56
2.49
1.29
0.95
0.21
0.63
53.93
18.47
18.52
6.91
1.68
8.36
56.20
19.65
18.81
7.29
2.08
8.36
64.06
24.03
21.38
6.32
2.42
9.91
18.87
7.44
6.68
1.80
0.55
2.40
19.31
7.66
7.27
1.30
0.59
2.48
6.42
2.58
2.17
0.58
0.21
0.88
6.30
2.48
2.08
0.60
0.23
0.91
38.39
17.32
6.75
7.85
2.09
4.39
43.43
19.35
8.05
8.12
2.65
5.26
47.57
20.80
8.66
9.03
2.80
6.28
11.26
5.03
2.10
2.18
0.51
1.44
13.38
6.14
2.58
2.15
0.73
1.76
4.90
2.18
0.93
0.82
0.37
0.61
38.67
29.78
1.70
3.43
0.32
3.43
43.04
33.55
1.82
3.48
0.38
3.81
44.91
35.75
1.79
3.06
0.34
3.98
10.80
8.60
0.44
0.77
0.08
0.91
13.52
11.08
0.50
0.71
0.09
1.13
3.88
3.05
0.17
0.26
0.04
0.35
Approved For Release 2004/09/28 : CIA-RDP80TOO702AO01000050001-4
 Approved For Release 2004/09/28 : CIA-RDP80T00702AO01000050001-4
FOREIGN TRADE BILLION US $, f.o.b., seasonally adjusted
United States
14.0
12.0
10.0
2.0
JAN APR JUL OCT JAN APR JUL OCT JAN APR JUL OCT JAN APR JUL OCT JAN APR JUL OCT JAN APR JUL OCT
Approved For Release 2004/09/28 : CIA-RDP80TOO702AO01000050001-4
A-14
 Approved For Release 2004/09/28 : CIA-RDP80T00702AO01000050001-4
United Kingdom
United States
OCT 78
13,011
117,064
100,727
16.2%
United Kingdom
OCT 78
6,264
6 025
56,265
57 957
46,177
49 019
21.8%
182%
15,138
141,859
121,889
16.4%
Balance
-2,128
- 24,795
-21,162
-3,633
Balance
239
-1,692
-2,842
1,149
8
128
234
79
224
65
21
5%
5
162
43
005
261
36
18
6%
Ja
an
OCT 78
,
,
,
.
OCT 78
,
,
,
.
p
7,262
57,475
51,418
11.8%
4,746
39,996
36,231
10.4%
Balance
866
21,759
13,806
7,953
Balance
416
3,009
30
2,979
684
12
917 i
102
86,269
19.3%
OCT 78
4
398
38
533
870
34
10.5%
West Germany
SEP 78
,
9,722
,
83,853
70,856
18.3%
,
4,439
,
36,329
,
33,228
9.3%
Balance
2,962
19,065
15,412
3,652
Balance
-41
2,204
1,642
562
France
7,483
65,411
53,441
22.4%
7,311
64,823
55,628
16.5%
171
589
-2,187
2,776
`?
Unclassified
578668 12-78
Approved For Release 2004/09/28 : CIA-RDP80TOO702AO01000050001-4
A-15
 Approved For Release 2004/09/28 : CIA-RDP80 00702AO01000050001-4
FOREIGN TRADE PRICES IN US $-
United States INDEX: JAN 1975 =100
West Germany
JAN APR JUL OCT JAN APR JUL OCT JAN APR JUL OCT JAN APR JUL OCT JAN APR JUL OCT
19 roved For F Jaage 2004/09/2a~Y&-RDP80T0b 2A001000050ai9i 48
lExport and import plots are based on five-month weighted moving averages.
A-16
 Approved For Release 2004/09/28 : CIA-RDP80T00702AO01000050001-4
,121
Canada
1974pproved Fnr` eeease 2004/ 86 CIA-RDP8d-M702A001000(Q3A-4
Unclassified
A-17 578663 12-78
 Approve~~Ir y 2UtW0?W8
T~Q7rQ?,tQ.Qi'1 ?050001-4
MONEY SUPPLY '
INDUSTRIAL
PRODUCTION '
Average
Average
Annual Growth Rate Since
Annual Growth Rate Since
Percent Change
Percent Change
Latest
from Previous
1 Year
3 Months
Latest
from Previous
1 Year
3 Months
Month
Month
1970
Earlier
Earlier'
Period
Period 1970
Earlier
Earlier
Brazil
Jun 78
2.2
36.5
35.5
40.8
India
Jun 78
-1.8 5.1
5.4
18.2
India
Apr 78
2.5
14.0
16.3
13.1
South Korea
Aug 78
6.4 22.8
23.1
12.8
Iran
Jul 78
0
28.2
26.7
17.9
Mexico
Aug 78
2.2 6.7
10.2
19.2
South Korea
Sep 78
-5.8
30.0
17.7
10.3
Nigeria
78 1
6.8 11.4
0.5
30.0
Mexico
Aug 78
2.9
21.2
40.3
35.9
Taiwan
Aug 78
3.0 16.3
31.0
42.1
Nigeria
May 78
-2.4
33.5
9.3
14.8
Taiwan
May 78
0.6
25.1
32.8
40.8
Seasonally adjusted.
Average for latest 3 months compared with average for previous 3 mon
ths.
Thailand
Apr 78
-3.2
13.3
12.5
32.3
' Seasonally adjusted.
' Average for latest 3 months compared with average for pr
evious 3 months.
CONSUMER
PRICES
WHOLESALE
PRICES
Average
Annual Growth
Rate Since
Average
Percent Change
Annual Growth Rate Since
Latest
from Previous
1 Year
Percent Change
--
-----
Mouth
Month
1970
Earlier
Latest
from Previous
1 Year
Month
Month
1970
Earlier
Brazil
Sep 78
2.0
28.6
40.1
Brazil
Sep 78
2.6
28.9
42.2
India
Jun 78
1.2
7.5
2.2
India
May 78
0.6
8.0
-2.8
Iran
Aug 78
-0.4
11.8
7.8
Iran
Aug 78
-1.3
10.0
7.8
South Korea
Oct 78
0.9
14.6
16.8
South Korea
Oct 78
1.1
15.7
13.1
Mexico
Oct 78
1.2
15.1
lb 8
exico
Mexico
Oct 78
1.2
16.0
13.9
Dec 77
3.1
16.6
31.3
Taiwan
Aug 78
0.4
8.1
1.6
Taiwan
Aug 78
1.9
9.8
-0.6
Thailand
Mar 78
-0.1
9.4
5.8
Thailand
Jun 78
0.9
8.7
8,4
EXPORT PRICES
OFFICIAL RESERVES
US$
.
Million US S
Average
Latest Month
Annual Growth
Rate Since
1 Year
3 Months
Percent Change
End of
Million US $ Jun 1970
Earlier
Earlier
Latest
from Previous
1 Year
Month
Month
1970
Earlier
Brazil
Jul 78
8,921
1,013
6,144
7,555
Brazil
Jul 78
6.9
11.9
-14.5
India
Jul 78
6,117
1,006
4,395
6,064
India
Sep 77
-2.7
10.0
18.4
Iran
Oct 78
11,951
208
11,546
11,982
South Korea
78 11
2.4
8.8
8.9
South Korea
Sep 78
4,534
602
4,040
4,199
Taiwan
Jun 78
1.9
11.3
3.3
Mexico
Jul 78
1,731
695
1,599
1,798
Thailand
Dec 77
0.1
10.2
-7.8
Nigeria
Sep 78
1,558
148
4,597
2,387
Taiwan
Jun 78
1,462
531
1,411
1,433
Thailand
Sep 78
2,269
978
1,925
2,161
Unclassified Approved For Release 2004/09/28~Lr$A-RDP80T00702AO01000050001-4
 Approved For Release 2004/09/28 : CIA-RDP80T00702AO01000050001-4
Latest 3 Months
Percent Change from
3 M
h
1 Y
---
ont
s
ear
-
Latest Period Earlier' Earlier 1978 1977 Change
Jul 78
Exports
44.3
-8.7
6,854
7,225
-5.1%
Jul 78
Imports
47.4
10.8
7,390
6,873
7.5%
Jul 78
Balance
-536
352
-888
Mar 78
Exports
-19.6
- 13.5
1,476
1,707
-13.5%
Mar 78
Imports
-24.1
9.7
1,444
1,316
9.7%
Mar 78
Balance
32
391
-358
Iran
Aug 78
Exports
2.9
10.4
15,868
15,635
1.50/0
May 78
Imports
- 1.6
1.6
5,705
5,259
8.5%
May 78
Balance
4,087
4,871
-783
South
Korea
Aug 78
Exports
12.6
21.6
7,798
6,217
25.4%
Aug 78
Imports
52.3
33.7
8,561
6,574
30.2%
Aug 78
Balance
-764
-357
-407
Mexico
Aug 78
Exports
19.1
30.4
3,301
2,743
20.4%
Aug 78
Imports
151.1
32.8
4,190
3,260
28.5%
Aug 78
Balance
-888
-517
-371
Nigeria
78 II
Exports
86.7
-26.0
1,808
2,526
-28.4%
78 I
Imports
579.5
115.0
1,808
841
115.0%
78 I
Balance
-974
368
-1,342
Taiwan
Aug 78
Exports
84.2
38.7
8,044
5,884
36.7%
Aug 78
Imports
68.9
32.5
6,439
5,119
25.8%
Aug 78
Balance
1,605
765
840
Thailand
Jul 78
Exports
7.1
10.4
2,246
2,099
7.0%
Jul 78
Imports
51.5
13.8
2,697
2,330
15.7%
Jul 78
Balance
-450
-231
-219
Approved For Release 2004/09/28hA-RDP80T00702AO01000050001-4 Unclassified
 Approved For Release 2004/09/28 : CIA-RDP80T00702AO01000050001-4
AGRICULTURAL PRICES MONTHLY AVERAGE CASH PRICE
WHEAT
$ PER BUSHEL
7.5 Kansas City No. 2 Hard Winter
CORN
$ PER METRIC TON 5 $ PER BUSHEL
Chicago No. 2 Yellow
-250
a0
1-14 DEC If
$ PER METRIC TON SUGAR
o ,PER POUND
No. 2 Medium Grain, 4% Brokens,
f.o.b. mills, Houston, Texas
1-14 DEC 11 ,0
1978
$ PER METRIC TON
14 DEC 8.16
7 DEC 7.88
NOV 78 8.00
DEC 77 7.78
1,000
500
200
7.94
1-14 DEC
1-4 DEC II'
O
0 0
1974 1975 1976 1977 1978 1974 1975 1976 1977 1978
COTTON
1.0 $ PER POUND
Memphis Middling 1 1/16 inch
0.2 4
2,000
350
14 DEC 0.6416
7 DEC 0.6563
NOV 78 0.6646
DEC 77 0.4938
COFFEE
Other Milds Arabicas, ex-dock New York
14 DEC 120.83
7 DEC 132.00
NOV 78 147.31
DEC 77 202.39
TEA
London Auction
SEP 94.2
1-14 DEC II
8,000
6,000
Approved For Release 2004/09/382bCIA-RDP80T00702AO01000050001-4
 Approved For Release 2004/09/28 : CIA-RDP80T00702AO01000050001-4
1-14 DEC
SOYBEAN OIL/PALM OIL
$ PER POUND
14 DEC: 0.3150
NOV 78 0.3042
7 DEC: 0.2900
C PER POUND
i AUSTRALIA
Boneless Beef,
f.o.b., New York
8 DEC 112.25
1 DEC, 113.25
NOV 78 109.02
DEC 77 i 71.89
FOOD INDEX
SOYBEAN OIL 1970=100
Crude, Tank Cars, f.o.b. Decatur 1,000
14 DEC, 0.2567
NOV 78 1 0.2489 800 400,
UNITED STATES
Wholesale Steer Beef,
Midwest Markets
9 DEC 84.16
2 DEC 84.56
SEP 78 81.64
DEC 77 50.70
1976 1977 1978
Unclassified
578662 12-78
NOTE: The food index is compiled by the Economist for 16 food commodities
which enter international trade. Commodities are weighted by
3-year moving averages of imports into industrialized countries.
Approved For Release 2004/09/28 :,oQ -RDP80T00702A001000050001-4
 Approved For Release 2004/09/28 : CIA-RDP80T00702AO01000050001-4
INDUSTRIAL MATERIALS PRICES MONTHLY AVERAGE CASH PRICE
COPPER WIRE BAR
140 0 PER POUND
LEAD
$ PER METRIC TON 45 q PER POUND
LME US 3,000
$ PER METRIC TON
1,000
LME US
13 DEC 37.6 38.0 38 .3
40 ' 1974 1975
1
,
000 1
13 DE
-
;2,000
II
1-1
3 DEC
1976 1977 1978 10 1974
LME US
13 DEC 31.334.8
6 DEC 30.3 35.0
NOV 78 31.1 35.0
DEC 77 24.4 31.0
C IL00
1975
1976
1977 1978
22,000
13 DEC
632.2
698.8
t
6 DEC
647.7
695.8
-120,000
NOV 78
680.8
745.9
DEC 77
579.7
615.1
---A 18,000
16,000
14,000
12,000
10,000
8,000
150 $ PER LONG TON
50
1-13 DEC LIO 250 _ `J 1-13 DEC 116,000
350 PLATINUM
PER METRIC TON 150 550 $ PER TROY OUNCE
1-11 DEC IL 150
1974 1975 1976 1977 1978 1974
MP USD
6 DEC 300.0 323.0
NOV 78 284.0 331.9
DEC 77 171.0 176.6
Approved For Release 2004/09/28 : CIA-RDP80TOO702AO01000050001-4
A-22
 Approved For Release 2004/09/28 : CIA-RDP80TOO702AO01000050001-4
ALUMINUM
Major US Producer
t per pound
55.25
53.00
53.00
US STEEL
Composite
$ per long ton
419.31
395.81
359.36
IRON ORE
Non-Bessemer Old Range
$ per long ton
22.55
21.43
21.43
CHROME ORE
Russian, Metallurgical Grade
$ per metric ton
NA
NA
150.00
CHROME ORE
S. Africa, Chemical Grade
$ per long ton
56.00
56.00
58.50
FERROCHROME
US Producer, 66-70 Percent
t per pound
43.00
42.00
41.00
NICKEL
Composite US Producer
$ per pound
2.02
2.06
2.07
MANGANESE ORE
48 Percent Mn
$ per long ton
67.20
67.20
72.24
$ TUNGSTEN ORE
Contained Metal
$ per metric ton
17,717.53
17,169.00
22,113.00
MERCURY
New York
$ per 76 pound flask
157.00
150.55
138.43
SILVER
LME Cash
t per troy ounce
589.38
514.64
482.70
GOLD
196.44
176.31
162.10
1970=100
250
1-5 DEC l
1974 1975 p M f s1976 WrT T 1977 ._ m~ 1978
48.00
327.00
20.51
150.00
42.00
43.00
2.41
72.00
18,082.00
134.50
436.90
130.44
1Approximates world market price frequently used by major
world producers and traders, although only small quantities of
these metals are actually traded on the LME.
2Producers' price, covers most primary metals sold in the US.
3As of 1 Dec 75, US tin price quoted is "Tin NY Ib composite."
4Quoted on New York market.
5S-type styrene, US export price.
6 This index is compiled by using the average of 13 types of lumber whose
prices are regarded as bellwethers of US lumber construction costs.
NOTE: The industrial materials index is compiled by the Economist for 19 raw
materials which enter international trade. Commodities are weighted by
3-year moving averages of imports into industrialized countries.
Unclassified
578664 12-78
Approved For Release 2004/09/28 : cj -RDP8OTOO7O2AOO1OOOO5OOO1-4