Background Paper No 2
SECRETARY OF STATE'S VISIT TO HONG KONG, 26–30 JANUARY 1980
BACKGROUND PAPER: HONG KONG'S TRADE WITH CHINA
Trading links
1. Hong Kong has for many years been China's window on the Western world and has provided about one-third of its foreign exchange. China's new leadership is intensifying its efforts to extract benefits from the territory's continued existence.
2. China is the main supplier of Hong Kong's basic needs (particularly food- stuffs, textiles and oil) and Hong Kong is China's leading export market. Its modern and efficient port facilities also make it important as an entrepot for Chinese exports. China's demand for consumer goods from Hong Kong is limited and it is now running a favourable balance of over US $2 billion.
CHINESE TRADE WITH HONG KONG 1975-79
US $ Million
Jan-June
1975
1976
1977
1978
1979
Chinese exports (fob)
1378
1583
1734
2252
1288
of which retained exports
1057
1138
1248
1542
817
re-exports
321
445
486
710
471
Chinese imports (cif)
33
30
44
63
122
of which
From Hong Kong
through Hong Kong
Balance
6
5
7
17
33
27
25
37
46
89
+1345
+1553
+1690
+2189
+1166
Finance and Commerce
3.
Source: Hong Kong Government Statistics
Trade apart, there are strong commercial and financial links between China and Hong Kong. China's investment in Hong Kong amounts to well over US $2.5 billion and its active participation in commerce, banking, property development and shipping in Hong Kong provides non-trade eamings of over 33 31 billion a year.