G.F. 73c
From.
Ref.
0000733
Director of trade Industry & Cut
CR/C1501/1
Tel. No.
.in.
3-670206
Date 4th April, 1773.
ONBW
16 Panetary for Xconomic vicou
To
Your Ref
1. GR. 43/583/S II
dated
15.3.28.
Hong Kong's Dependence on China for 011 Products
You have already received, under cover of my memo(33) in this series dated 9 Karch, statistics showing the degroe Hong Kong's Cupondence on imports of oil products from China from 1973 to 1977. These statistics (a repeated in a simpler format at enclosure 1 to this mono. The following paragraphs represent a brief analysis of the statistics.
2.
During the past five years, Hong Kong's imports of oil products from China have increased substantially. In 1973, total imports of Chinace oil products were only 33,713 long tons; but these had increased nearly 30 times to 1,035,950 long tons in 1977, (In comparison, over the case period, Hong Kong's total imports of oil producto from all sourcco increased only by 16.5). In 1973, Chinese oil products accounted for a moro 0.7% of Hong Kong's total oil products imports, but in 1977 their share vas 17.8
3.
Hong Kong imports five types of oil products from China. The degree of dependence on China as a source of supply for each type is as follows:
SAFE
CARE
REGISTRY
6 APR 1978)* 4450 TWARE LETTER
Jet A- Import from China started only in 1975. In that year, imports from China accounted for 0.6 of total Hong Kong imports of the item, but the percentage has increased to 20 in 1977.
Kerosene
Gas Oil
what
A greater dependence on imports from China started in 1974 when Chinese kerosene accounted for 17.2 of total Hong Kong importe in the year. In the three years from 1975 to 1977. China's share of liong Kong's kerosene imports has remained at around 40.
Again a greater dependence on China started in 1974 when imports from China accounted for 21.2 of total Hong Kong imports in the year. This increased to 43.2 in 1975, then dropped slightly in 1976, but further incrcaced to 46.9% in 1977.
Diesel Fuel
Fuel Oil oil
Hong Kong first imported Chinese diesel fuel in 1975, in which year it accounted for as much as 72 of total Hong Kong imports of the product. However, this percentage dropped to 34.8 in 1976 and further to 29.7 in 1977.
China is still not a very big supplier of fuel oil. Although in the past four years imports from China have increased by 597% in absolute terms, each year Chinese fuel oil accounted for less than 10% of total importo.
CONFIDENTIAL
EW
2
4.
As a
As can be seen above, llong Kong depends quite heavily on China for the supply of kerosene and gas oil. China's share of Hong Kong's total imports of all five types of oil products mentioned above was 13.6% in 1977. whole, China is now the second largest supplier of oil products to Hong Kong, but is still far behind the largest supplier Singapore, which according to trade statistics, accounted for over 65% of Hong Kong's total imports of oil products.
5.
The question whether Hong Kong is able to get alternative sources of oil supply if circumstance so require is I think largely academic. If China reduces its supply of oil products to Hong Kong the major oil companies will presumably return to the market unless, of course, there is another Arab cil embargo at the same time, in which event the oil companies will only be able to provide a percentage of what they had previously been supplying immediately before the imposition of the embargo.
c.c. Secretary for Security
NY/TKCY/cw
:
wer
(N. Yek)
for Director of Trade Industry & Customs