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Kong exceeding imports from Hong Kong by US$2.34 billion.
This compares favourably with a surplus of US$1.84 billion
(15) in the first half of 1986
These figures reflect
•
the importance of Hong Kong as a major source of net
foreign exchange earnings for China. Without the trade
surplus with Hong Kong, China's overall trade deficit
would probably have been much larger.
42.
Outward processing arrangements with China seem
likely to expand further, given the sustained demand for
Hong Kong products in overseas markets. For Hong Kong's
manufacturing sector, the availability of sub-contracting
capacity in China enhances its overall productive
capacity, enabling it to cope with a sharp increase in
orders from overseas countries. Further, the savings in
production costs obtained from these sub-contracting arrangements have helped to maintain the price
competitiveness of Hong Kong's products. From China's
point of view, outward processing activities are a means for promoting export-oriented industrialization in
Shenzhen and in the counties in the Pearl River Delta
(15) In the first half of 1987, China's exports to Hong Kong and Macau) amounted to US$5.86 billion while its imports from Hong Kong (and Macau) stood at US$3.52 billion. The corresponding figures for the first half of 1986 were US$4.16 billion and US$2.32 billion.
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