CONFIDENTIAL # 3

17 -

(8) Hong Kong

For 1986 as a whole, the value of Hong

Kong's domestic exports to China amounted to HK$18,022

million, representing an increase of 19% over 1985.

30.

Re-exports from Hong Kong to China increased in the fourth quarter of 1986, reversing a declining trend (on a year-on-year comparison) since the fourth quarter of

1985. At HK$12,990 million in the fourth quarter of 1986, the value of re-exports to China was 24% higher than in the same quarter in 1985. In the first three quarters of 1986, the respective rates of decline were 33%, 25% and

6%. For 1986 as a whole, re-exports to China amounted to HK$40,894 million, 11% less than in 1985.

31.

Analysed by products, domestic exports to China

of all major commodities registered increases in the fourth quarter of 1986. Compared with the same quarter in 1985, domestic exports of telecommunications and sound recording apparatus, textile yarn and fabrics, clothing, and miscellaneous manufactured articles grew strongly in the fourth quarter of 1986 as did domestic exports of electrical machinery and of photographic supplies, optical goods and watches and clocks (see table for details).

On

(8)

During 1986, the Yen appreciated by 46% against the Reminbi, compared with an appreciation by 17% of the Hong Kong dollar against the Renminbi. Partly reflecting this, China's imports from Japan declined by 16% in money terms in the first three quarters of 1986.

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