CRS-12
*J
Economically, Beijing would appear not to want to impair the rapid
growth of free enterprise in Hong Kong because China has a large stake in
the territory's growing economy. Thus, Hong Kong is China's third largest
trading partner. The favorable balance in PRC trade with the colony along
with remittances by Hong Kong residents to relatives in the PRC provide for
an estimated 30-40 percent of China's foreign exchange earnings. Hong
Kong is also a major entreport for PRC trade, handling an estimated $2.3
billion of PRC exports and $1.5 billion of imports during 1981. It remains
the major conduit for PRC trade with Taiwan, South Korea and South Africa
areas with which the PRC has difficulty in managing a formal trade relation-
ship.
Hong Kong entrepeneurs provide the bulk of investment for the new
Chinese Special Economic Zone which adjoins the colony in Shenzhen, and
also provide the major share of foreign investment for Guangdong Province.
Hong Kong is a rear supply and operations base for the largescale oil ex-
ploration and development effort just getting underway in the South China
Sea.
It has excellent modern transportation facilities, including the
best deep water port along the China coast, the third largest container ter-
minal in the world, and a modern airport which handles 7 million passengers
and 300,000 tons of cargo each year. Hong Kong also provides the PRC with
easy access to modern financial, trade and management institutions, where
PRC representatives can learn from Chinese people in Chinese language
the intricacies of modern Western business practices. In Hong Kong, this
can be done at a safe distance, without jeopardizing Beijing's strong com-
mitment to maintaining its socialist system as free as possible from the
"corrupting" influences of the "bourgeois" ideas of the West.