CONFIDENTIAL
CRC INF 8/89
(CEC 3/89)
Results of the Survey of Exports to China for Outward Processing
Background
With increasingly close economic cooperation between Hong Kong
and China, there are various ways by which Hong Kong businessmen involve
themselves in outward processing activities in China. A manufacturer in
China may take up part of the vertically integrated production processes
for a manufacturer in Hong Kong. The same firm in China may however also
engage in production activities which do not have any connection with businesses
in Hong Kong. Moreover, it may be either an enterprise of wholly PRC interest,
or a joint venture between the Chinese side and business interests from Hong
Kong. In another case, a trading firm in Hong Kong may arrange for the supply
of raw materials to a manufacturing enterprise in China and for the marketing
of finished goods produced by the latter, but the raw materials and finished
goods may not have to pass through Hong Kong at all. There may also be cases
in which a Hong Kong businessman simply invests in China and performs manufacturing
and marketing activities solely there. In yet other cases, firms in Hong
Kong may be involved in a mixture of the above activities.
2.
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The complexities of business arrangement as exemplified above make
any study of outward processing activities rather difficult. As a result,
there can be no simple answer to questions like : the number of firms and
workers who are engaged in China for outward processing for Hong Kong; how
outward processing activities in China affect Hong Kong's manufacturing industries;
and how such activities affect Hong Kong's external trade. To address questions
on outward processing activities in China, many types of information, both
statistical and non-statistical, are required to be collected and analysed.
But such information is not easy to obtain.