- 9 -
also has good and improving transport links with the Chinese
hinterland - by road, rail, air, sea and river. And Hong
Kong's traditional role as an entrepot for Chinese trade, which
was disrupted by the international embargo at the time of the
Korean War, is now stronger than ever. Seventy-eight percent
of Hong Kong's large re-export business comes from, or is
destined for, China. This amounted to trade both ways worth
HK$116 billion (US$15 billion) in the year up to the end of
June 1987. Some 2,800 Chinese vessels annually use the port of
Hong Kong, nearly ten times the number of ten years ago.
International confidence in Hong Kong, matching the
international interest in Hong Kong, has been high since the
Joint Declaration. But what of those who have the greatest
interest of all: the people of Hong Kong? Are they all
leaving and taking their money with them, as some of the
international press have alleged? Hardly. There is an
outflow, not a flight, of capital from Hong Kong. This is
normal in any strong economy: Japan is a good example of a
similar trend writ large. The important point is that there is
no shortage of investment in the territory, whether in plant
and machinery (1984-86 was the best three year period for
growth in this area of investment in Hong Kong's history) or
for multi-billion dollar construction projects. Hong Kong
businessmen may be buying into companies overseas, such as
Husky Oil in Canada or Marine Midland Bank in the United
States; but they are also making investments in Hong Kong,
many of which will not pay for themselves until well into the