XN000022-1985-11-07 — Page 6

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THURSDAY, NOVEMBER 7, 1985

+ONLY BY THIS PROCESS WILL HONG KONG ACQUIRE THE TECHNIQUES AND THE EXPERTISE WHICH WILL BE OF VALUE TO CHINA.

*ONLY BY THIS PROCESS WILL HONG KONG RETAIN AND INCREASE THE PURCHASING POWER TO BUY THE INDUSTRIAL AND CONSUMER GOODS FROM CHINA, AS A RESULT OF WHICH IT REPRESENTS A VALUABLE SOURCE OF FOREIGN EXCHANGE EARNINGS TO CHINA.

+SINCE 1950 HONG KONG HAS SUCCEEDED BY FOLLOWING THIS PROCESS, THANKS IN NO SMALL PART TO A CONSISTENT ADHERENCE TO ITS ESTABLISHED, FREE ENTERPRISE ECONOMIC POLICIES.

+ THE EVOLVING COMPLEMENTARY ROLE BETWEEN FACTOR IES IN HONG KONG AND IN CHINA INDICATED BY OUR CHANGING PATTERN OF TRADE IS PART OF THIS PROCESS. SO THE PRECONDITIONS FOR HONG KONG'S CONTINUED SUCCESS ARE LIKELY TO BE MET.

*WITH THIS SUCCESS ASSURED, IT IS MY FIRM BELIEF THAT A SOUND BASIS EXISTS FOR HONG KONG TO CONTINUE TO SERVE AS

TO WITH

A GABA AND THAT THIS WILL BE TO

THE MUTUAL BENEFIT OF CHINA, THE FOREIGN CONCERNS, AS WELL AS HONG KONG,+ MR HO SAID.

REFERRING TO PREDICTIONS BY SOME OBSERVERS THAT HONG KONG'S ROLE IN CHINA'S FOREIGN TRADE WOULD DIMINISH WITH THE DEVELOPMENT OF DIRECT TRADE AND ECONOMIC RELATIONSHIPS BETWEEN CHINA AND THE DEVELOPED WORLD, MR HO SAID THE SPECTACULAR GROWTH IN HONG KONG'S RE-EXPORT TRADE OVER THE PAST FEW YEARS WAS ONE INDICATION OF HOW MISPLACED THESE PREDICTIONS HAD BEEN TO DATE.

+CHINA'S INFRASTRUCTURAL REQUIREMENTS, NOTABLY IN THE TRANSPORT AND COMMUNICATIONS FIELD, MEAN THAT HONG KONG'S ATTRACTIONS AS A CONDUIT FOR TRADE AND OTHER FORMS OF ECONOMIC CONTACT WITH THE OUTSIDE WORLD ARE IN NO WAY DIMINISHED BY THE ADOPTION OF OPEN DOOR' POLICIES.+

IN 1980, HONG KONG'S RE-EXPORTS AMOUNTED TO $30.1 BILLION AND REPRESENTED 30.6 PER CENT OF ITS TOTAL EXPORTS.

IN 1984, THIS TRADE HAD GROWN TO $83.5 BILLION, REPRESENTING 37.7 PER CENT OF TOTAL EXPORTS. WITH OVERALL EXPORT GROWTH LIMITED TO RE-EXPORT SECTOR IN 1985, RE-EXPORTS IN THE THIRD QUARTER COMPRISED 42.9 PER CENT OF TOTAL EXPORTS.

IN THIS EVOLVING SITUATION CHINA TOOK 34 PER CENT OF RE-EXPORTS THROUGH HONG KONG AND ALSO SUPPLIED 34 PER CENT OF THE GOODS HONG KONG RE-EXPORTED: THUS OVER TWO-THIRDS OF HONG KONG'S RE-EXPORT TRADE IN 1984 INVOLVED CHINA.

IN 1985 SOME 47 PER CENT OF HONG KONG'S RE-EXPORTS WENT TO CHINA.

+SO IT IS HARDLY SURPRISING THAT CHINA IS NOW HONG KONG'S LARGEST TRADING PARTNER.+

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