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From this trade surplus;
from remittances by Overseas Chinese in or
through Hong Kong (estimated at £50 £35 million in 1966) and from
the operations of Chinese financial and commercial enterprises in
Hong Kong, total foreign exchange earnings estimated at £200-210
million accrued in 1966 (over a third of China's total earnings of
foreign exchange).
3. These earnings, whicil are regularly converted into sterling,
have played a major role in financing China's trade deficits with
other areas of the free world with the industrial countries of
Western Burope in 1959-60 and again in 1965-66 and with Canada,
Australia and other major grain exporters to China.
4.
Their rapid
Earnings in 1960-62 averaged some £80 million.
rate of increase by 1966 is unlikely to be maintained and from now on
Hong Kong's relative importance as a source of foreign exchange may
even gradually decline. However, it could remain the largest single
scurce of earnings for some years to come.
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China's Use of Hon: Kong's Trade Facilities
Hong hong's domestic exports to China are negligible. There
is a modest re-export trade in chemicals, base metals, textile
ibres, etc.; this is, however, steadily decreasing as China ships
more and more goods from the original supplying countries.
6. The value of Hong Kong's re-exports of goods obtained from China
is belicved to be about 234 million (about 20%) in 1966. Those
include Chinese food specialities, textiles, animal by-products and
medicinos and are sent mostly to South East Asia, Japan and Europe.
It is evident that China still finds it convenient to use Hong Kong
and its variety of services. China's own trading organisations are
not nearly so well equipped as Hong Kong merchants to handle a
variety of small orders from overseas markets; as time goes on,
however, they may be expected to improve their own facilities and
rely less on those of liong Kong.
7. hong kong is in addition a useful trading outpost for China,
especially as regards commercial dealings with countries with whom
it does not have diplomatic relations.
Freliminary negotiations
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