SECRET
Shortages of supply (reportedly in evidence at the Canton Pair in April 1966) may also have played a part. The third and fourth quarters showed a sufficiently large recovery to lift to
of 19% over 1962 Gil betal figure of Chinese exports to 2173 milliom, an increase
Under normal circumstances Hong Kong's comsumption require- wants could be expected to continue to grow, but further Chinese suocesses would probably burn increasingly on the quality and diversity of their exports.
5. Intrepot treds. The figures show that Hong Kong's domestic exports to China are negligible, and that most of the items sold origișate elsembere. Such re- exports include shemicals, base motals, textile fibres, and animal and vegetable materials. Their valus, however, is steadily decreasing, as Chine ships more and more goods from the original supplying countries. The value of Hong Kong's re- exports of goods obtained from China is not published, but information from Hong Kong suggests it may inve been around £3 million (about 20%) in 1966. Gooda thus re-exported include Chinese food specialities, textiles, animal by-products and medicines; and are sent mostly to South East Asia, Japan and Europe. It is evident that the Chinese still find it convenient to use Hong Kong and its variety of services for shipping many of their exports. Their ơm treding organisations, moreover, are not nearly so well equipped as Hong Kong meraberts to handle a variety of mall orders from overseas marketa. fevertheless, as time goes on, Chinese may be expected to improve their own facilities, and rely correspondingly less on those of Hong Kong.
6. Commercial liaison. Hong Kong is in addition a useful trading outpost for China, especially as regards commercial dealings with countries with whom Paking does not have diplomatic relations. Preliminary negotiations for grain deals with Australia and Canada have often taken place in Hong Kong. Western firms, too, readily make contact with Chinese commercial organisations in the Colony.
Overseas Remittances
7. Most of the remittances from Overseas Chinese to the mainland are channelled through communist-controlled banks in Hong Kong. Up to 1958 they averaged about £25 million yearly, but subsequently there was a prolonged decline, largely because of unfavourable reaction among Overseas Chinese to the introduction of O CHRELIN 05. This was accentuated by the tendency of people abroad to send food parcels instead of cash at the time when the Chinese food situation was at its worst- although it temporarily increased foreign exchange receipts from paroel duties and other charges. Cash remittances in 1961 and 1962 were probably down to 15 million, but have subsequently recovered, reaching an estimated £30-35 million in 1965. This range is perhaps unlikely to be significantly exceeded; indeed as a result of the Cultural Revolution and events in China, remittances declined in 1966, totalling an estimated £23-28 million for the year. Investments by Hong Kong Chinese in Overseas Chinese investment companies probably amounted to £1-2 million
year.
Footnote
(9). ▲ part of this increase must be attributed to increased coverage of the trade statistios following regulations brought in in October. It is probable that compared with 1965, the recorded figures for 1966 overstate the overall grówth in Hong Kong trade by some X.