CONFIDENTIAL

19

products.

(8)

Thus Hong Kong's re-exports of China origin have grown rapidly in 1986 and in the first half of

1987

Through providing efficient entrepôt services, Hong Kong can continue to help China in promoting its exports and improving its external sector balance.

34.

As China's foreign exchange controls continue, the Hong Kong dollars circulating in China are likely to continue to command a premium in the black market over the official exchange rate of the Renminbi. The widespread circulation of Hong Kong dollars in China, particularly in the Pearl River Delta region, is a reflection of their acceptability and purchasing power beyond Hong Kong.

(8)

Hong Kong's re-exports

of China origin

Year-on-year Growth rate #

1985 Q1

7,464

19

Q2

8,281

17

Q3

9,069

24

Q4

9,815

31

Annual

34,628

23

1986 Q1

9,489

27

Q2

11,778

42

Q3

14,143

56

Q4

16,188

65

Annual

51,597

49

1987 Q1

16,499

74

Q2

# in money terms

20,026

70

G.F. 326

CONFIDENTIAL # *

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