BUSAAF
HK$90.1 billion (approximately £6.8 billion). After three years of budget deficits, Hong Kong returned to balanced budgets in 1985-86, and surpluses since. The small surplus of HK$720 million (compared to HK$9.2 billion in 1989/90) reflects a commitment by government to improve infrastructure. Public spending as a proportion of GDP is likely to increase over the next few years. The main areas of Government spending include social and community services (health, education, transport), Security (defence, police, immigration) and economic and general services (ports, airports and administration). The much smaller surplus reflects the combination of slow growth in revenues and heavy spending commitments arising from the Government's amibitious plans for improving the infrastructure.
12.
The financial sector in Hong Kong has grown rapidly in both domestic and international importance in recent years. Hong Kong now ranks as one of the world's leading international financial centres. Unlike most major economies, Hong Kong has no central bank. The Commission of Banking is responsible for supervising financial institutions, while the Exchange Fund manages foreign exchange reserves and operates on the Hong Kong money market. Bank notes are issues by the two note-issuing banks (the Hong Kong and Shanghai Banking Corporation and the Standard Chartered Bank).
13. At the end of 1988, there were 158 banks in Hong Kong licensed under the Banking Ordinance, of which over a quarter were local companies. They maintained a total of 1,397 offices in Hong Kong. In addition there were 148 representative offices of foreign banks and 75% of the top 100 banks in the world are now established in
Hong Kong.
Relations with China
14.
Approximately 1/3 of China's exports pass through Hong Kong. Hong Kong and China are now each other's largest trading partners. In 1989 total imports from China were valued at HK$ 197 billion (of which HK$188 billion were re-exported). Total exports to China were HK$146.8 billion, of which HK$104 billion were re-exports. Chinese involvement in Hong Kong is substantial. In 1987 China's 47 investments in Hong Kong's manufacturing industries were valued at