THE ECONOMY
major development in 1993 was the listing of the shares of six of China's state-owned enterprises on the Hong Kong Stock Exchange.
The prospects for further development of economic and financial links between Hong Kong and China continue to be good, given the firm foundation which has been established over the years as well as the broadened ‘open door' policies and accelerated economic reforms in China.
The Economy in 1993 External Trade
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Reflecting the on-going structural shift of domestic exports to re-exports, re-exports grew further by 19 per cent in value terms in 1993 over the level for the previous year. With an estimated one per cent decrease in prices, there was a 20 per cent increase in real terms. The corresponding growth rates in 1992 were 29 per cent and 28 per cent, respectively.
China remained the largest source of, as well as the largest market for, Hong Kong's re-exports. Supported mainly by the expansion of outward processing activities across the border, re-exports involving China (in both directions) continued to rise rapidly. Re-exports not involving China showed only a marginal increase. The other major re-export markets were the United States of America, Germany, Japan, Taiwan and the United Kingdom. The major suppliers of Hong Kong's re-exports, apart from China, were Japan, Taiwan, the USA, and the Republic of Korea.
Analysed by end-use categories, Hong Kong's re-exports comprised mostly consumer goods, and raw materials and semi-manufactured goods, which represented 54 per cent and 26 per cent, respectively, of the total value of re-exports. Re-exports of footwear, clothing, telecommunications and sound recording and reproducing equipment, textile fabrics, and electrical machinery and appliances showed faster increases than re-exports of other commodity items.
The value of domestic exports fell by five per cent in 1993 over 1992. As prices were relatively static in 1993, there was a five per cent decline in real terms. This compared with an increase of one per cent in value terms or virtually no growth in real terms in 1992. On a year-on-year comparison, domestic exports recorded virtually no change in real terms in the first quarter of 1993, but fell by seven per cent, five per cent and seven per cent in the following three quarters, respectively.
Domestic exports to China were up by three per cent in real terms in 1993 – a much slower growth rate than the 14 per cent increase recorded in 1992. A large proportion of these domestic exports were related to outward processing arrangements commissioned by Hong Kong companies. Domestic exports to the USA, Germany, the United Kingdom and Japan declined, by nine per cent, 11 per cent, 10 per cent and 13 per cent, respectively, in real terms in 1993. On the other hand, domestic exports to a number of economies in the Asia-Pacific region continued to rise considerably.
Analysed by major product categories, domestic exports of metal manufactures recorded the fastest growth, up by four per cent in real terms. This was followed by domestic exports of electronic components, up by three per cent. Conversely, domestic exports of textiles, metal ores and scrap, clothing, watches and clocks, and electrical appliances fell, by one per cent, four per cent, eight per cent, 15 per cent and 20 per cent, respectively, in real terms.
Imports grew by 12 per cent in value terms, or by about 13 per cent in real terms, in 1993. This compared with an increase of 23 per cent in value terms, or 22 per cent in real
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