CONFIDENTIAL
THE ECONOMIC SYSTEM OF HONG KONG
1. The Economic System in Hong Kong is almost totally dependent
on
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upon the trade, that exists in to and out from the territory. absence of all natural resources means that foreign exchange earnings raised on the export market must at least balance the cost of imports.
In
The trade flow through Hong Kong totals about HK$270 bn. 1982 total exports were HK$127.4 bn of which HK$83 bn were domestic exports, the remainder being re-exports. Over the last 10 years, domestic exports have grown at a rate of 8.2% per annum, re-exports at 15%. The largest single contributor to Hong Kong's Gross Domestic Product of HK$157.3 bn is the manufacturing sector which accounts for 25% of this total.
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3. The United Kingdom has contributed, in many ways, to the ease with which Hong Kong can manipulate its export market. It occupies a unique position in the General Agreement on Tariffs and Trade (GATT) because the United Kingdom is one of its founder members. well as being entitled to consequent founder membership rights of its own, Hong Kong also enjoys most-favoured-nation (MFN) status in the markets of all contracting parties. It is hardly surprising, therefore, that 618 of all Hong Kong's domestic exports go to EEC and-USA. However, to prolong this situation, the link with the United Kingdom must be maintained.
4. 'Because of the United Kingdom's accession to the International Trade in Textiles (MFA), formerly the Cotton Textiles Arrangement. (STAL Hong Kong has also been allowed membership. Hong Kong attaches much importance to this, largely because 41% of the territory's exports are textiles and garments, and the MFA exists to organise the international textile trade to the mutual advantage of all the concerned countries. Hong Kong has figured with increasing significance in the running of the MFA the Textile Surveillance Body, which supervises the MFA, and reserves one of its eight seats to be occupied by a Hong Kong representative on alternate years'.
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CONFIDENTIAL