TNAG-0839-FCO40-1048-Relations-between-Hong-Kong-and-China-1979 — Page 71

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Alexander Eckstein, ed., Praeger, New York, 1971). In 1952 the balance changed and a trade surplus earnt China HK$830 million. 15.75% of all Chinese exports were to Hong Kong. By 1966 the trade surplus had risen to $2,769 million (and 22.3% of all exports) and in 1978 the surplus stood at $10,302 million (and 23.1% of all exports), making Hong Kong the most valuable source of foreign exchange. An additional source is the remittance channel used by overseas Chinese through local banks. There is no accurate figure for Chinese invisible earnings through Hong Kong but one estimate has put the figure for 1978 in excess of $6,600 million.

8. Chinese exports to Hong Kong. The reversal in the balance of trade was achieved, partly at least, by maintaining a high level of exports to Hong Kong. By 1956 Chinese exports to Hong Kong had surpassed the pre-embargo level and the rate of increase became more or less steady. In 1958, however, there was a startling 23% increase over 1957 in the total value' of Chinese goods exported to Hong Kong. At the time, this was interpreted by a number of Hong Kong commentators as part of a Chinese economic "offensive" against the Colony, and represented the "dumping" of Chinese goods in an effort to ruin local food producers.

9.

Chinese imports from Hong Kong. The more significant change, however, was in the rapid decline in Chinese purchases from Hong Kong. The effects of the trade embargo during the Korean war reduced the value of Chinese imports from Hong Kong from HK$1,742 million in 1951 to $519.9 million in 1952. What is more, despite the gradual whittling away of trade restrictions (within the limits of Hong Kong's international economic and trading obligations), Chinese imports continued to decline throughout the period up to the end of the Cultural Revolution. By 1959 Chinese purchases had fallen to $114.3 million and by 1968 were a mere $44.8 million

10. Current trends. During the 1970s Hong Kong has continued to provide China with a valuable source of foreign exchange and Chinese exports to the Colony have steadily increased. However, the value of all Chinese imports from Hong Kong has also shown an upward trend. It is this latter flow of trade

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