XN000022-1996-11-14 — Page 6

5.

To provide a better understanding of the nature and importance of outward processing in China initiated by Hong Kong firms, the Census & Statistics Department has been conducting a sample survey as from the third quarter of 1988 to distinguish Hong Kong's exports to China into those which are for outward processing and those which are not.

The scope of the survey has been extended as from the first quarter of 1989 to segregate Hong Kong's imports from China into those which are related to outward processing and those which are not. Starting from the first quarter of 1991, the scope of the survey has further been extended to cover Hong Kong's re-exports of China origin to all countries other than China.

The results for the second quarter and the first half of 1996 are now available.

In value terms, $58,204 million of Hong Kong's total exports to China in the second quarter of 1996 were for outward processing, representing an increase of 2% over the second quarter of 1995. The value of domestic exports to China for outward processing decreased by 6% to $10,849 million, whilst the value of re-exports to China for outward processing grew by 4% to $47,354 million.

Over the same period of comparison, the value of imports from China related to outward processing increased by 15% to $111,518 million. On the other hand, $131,192 million of Hong Kong's re-exports of China origin to all countries other than China were produced through outward processing in China, representing an increase of 11%.

In the first half of 1996, $103,687 million of Hong Kong's total exports to China were for outward processing, representing a decrease of 1% over the first half of 1995. The value of domestic exports to China for outward processing decreased by 4% to $19,765 million while that of re-exports to China for outward processing was estimated to be $83,922 million which was, about the same as in the first half of 1995.

Over the same period of comparison, the value of imports from China related to outward processing increased by 14% to $209,635 million. On the other hand, $247,779 million of Hong Kong's re-exports of China origin to all countries other than China were produced through outward processing in China, representing an increase of 11%.

For the purpose of the survey, exports to China for outward processing refer to raw materials or semi-manufactures exported from or through Hong Kong to China for processing with a contractual arrangement for subsequent re-importation of the processed goods into Hong Kong.