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Economically, Beijing would appear not to want to impair the rapid
grow of free enterprise in Hong Kong because China has a large stake in
the territory's 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 entrepot for PRC trade, handling an estimated $2.3 billion
of PRC exports (10.6% of all PRC exports) and $1.5 billion of imports (6.9%
8/ of all PRC imports) during 1981. It remains the major conduit for
PRC trade, estimated at several hundred million dollars each year, with
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Taiwan, South Korea and South Africa areas with which the PRC has dif-
9/
ficulty in managing a formal trade relationship.
Hong Kong entrepeneurs, who provide the bulk of investment in Hong
Kong, are also the major investors in the new Chinese Special Economic
Zone which adjoins the colony in Shenzhen and provide the major share of
foreign investment for Guangdong Province. Hong Kong is a rear supply and
operations base for the large scale oil exploration and development effort
just getting underway in the South China Sea. It has excellent modern trans-
portation facilities, including the best deep water port along the China
coast, the third largest container terminal in the world, and a modern air-
port 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
8/ U.S. Department of Commerce. Foreign Economic Trends and Their Implications for the United States. Hong Kong 1983.
9/ See Far Eastern Economic Review, March 17, 1983.
P. 74.