Problems relating to Trade and Investment on Hong Kong

12. Exchange controls
Issue	Issue details	Requests	Reference

(1) Radical Fluctuation In Exchange Rate

- As it stands, Member Firm's Subsidiary (MFS) benefits from exchange gain on a direct export transaction in yen. Nevertheless, negotiation for raise in price is difficult. In a transaction with its parent company, the prevailing Yen depreciation enables MFS to offer special prices to its customers. However, MFS runs on a thin margin, so that if the exchange rate swings toward appreciation of Yen, it will instantly show operational loss: such is the severity of the fluctuation band.

- It is requested that the government of the Hong Kong special administrative region of the People's Republic of China (HKSAR) will use its best efforts to:
-- stablise the exchange rate fluctuations, and
-- keep the fluctuation band within 6%.

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