CONFIDENTIAL
BENEFIT TO CHINA FROM HONG KONG
Foreign Exchange
1. China's foreign exchange earnings from Hong Kong (including trade in goods and services plus remittances) estimated at between 30-50% of total. In absolute terms this could be as high as US$6 billion*. Hong Kong now China's biggest market textiles, oil and water.
foodstuffs,
Hong Kong Investment in Guangdong Province and other parts of China
2. Majority of investment projects in Chinese Special Economic Zones involve Hong Kong firms, who provide capital and expertise.
Acquisition of Expertise
3. Chinese working in Hong Kong gain expertise in banking, trade, commerce, construction. Numerous delegations sent there to learn. Important to China's 'modernisation' programme.
Entrepôt
4. Chinese trade through Hong Kong has increased sharply in last 2 years.
First half of 1981 Chinese exports through Hong Kong up 57% to US$ 1 billion. Imports up 136% to US$ 750 million. Particularly important for Taiwan trade which has to be conducted indirectly.
Harbour
5.
China.
Modern container and other harbour facilities best in South
Financial and other Facilities
6. Besides giving the Hong Kong branch of the Bank of China a leading role in its international financial strategy, the Chinese Government also makes extensive use of non-Communist financial institiutions in the Territory.
Chinese Investment in Hong Kong
7. Substantial - 13 banks, investment companies, shipping, manufacturing and retail. Major stakes in variety of construction projects. Investment by 1979 amounted to more than US$ 2.5 billion. Increasing rapidly. No restrictions on remission of profits to China.
Air Services
Chinese air routes with Hong Kong are only commercially viable ones they have apart from Peking-Tokyo.
8.
1 billion = 1,000 million
3
Hong Kong and General Department 8 December 1981
CONFIDENTIAL