CONFIDENTIAL #3
CRC 24/86
(CEC 15/86)
Implications of Growing Hong Kong-China Economic Relations for the Hong Kong Economy
Executive Summary
Introduction
Economic relations between Hong Kong and China
have undergone rapid growth and development since 1979.
These relations, which include merchandise trade, tourism,
business services, direct investment, financial links and
infrastructural links, have important implications for the Hong Kong economy. This paper provides an analysis of the present situation, presents a view on likely developments
in the longer term, and discusses the role the Government
should play in this context.
An overall view of the present situation
2.
At the regional level, Hong Kong is a city of
considerable importance to the Chinese economy. While
China is Hong Kong's largest trading partner, Hong Kong is China's second largest trading partner, after Japan. The
Hong Kong Branch of the Bank of China is the largest of
all its branches, either in China or abroad. Up to 80% of
all foreign investment in China has come from Hong Kong.
Corporations controlled by the PRC have also invested substantially in Hong Kong. There are other intangible
aspects, particularly as regards Hong Kong's position as a
centre for business contacts, for tourism and travel, and
source of financial and other business services.
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