ANNEX A
The Hong Kong Government estimate that if China were to lose
its MFN status the impact would be:
Directly
(a) 33% to 44% (US$3.5 bn to US$ 4.6 bn) reduction in Hong Kong's re-exports from China to the US;
(b) a reduction of 5% to 7% (US$9 bn to US$12 bn) in Hong
Kong's overall trade;
(c) a loss of between 32,000 and 43,000 jobs in Hong Kong;
(d) a reduction of between 1.3% and 1.8% in the expected GDP
growth (ie about a one third drop).
Indirectly
(a) significant adverse effects on manufacturing entures and other production arrangements by Hong Kong and foreign companies in China;
(b) the undermining of Hong Kong's role as a gateway to
China thus affecting longer-term growth potential and business confidence in Hong Kong;
(c) negative effect on foreign investment into Hong Kong on which Hong Kong's future stability and prosperity depend;
(d) further losses in income and jobs in Hong Kong if China
has to cut back on imports as a result.
REXACT/3