TNAG-0938-FCO40-1157-Visit-of-John-Nott--Secretary-of-State-for-Trade--to-Hong-Ko-1980 — Page 261

2

Background Paper No 2

Industrial co-operation

4. The Chinese are attempting to broaden the links with Hong Kong by encouraging Hong Kong businessmen to invest in joint ventures in China, particularly near the Hong Kong border, to produce goods for export. A large number of projects is claimed to have been agreed. Some of the projects under way have inevitably encountered teething troubles but both sides have a strong interest in making them successful and in time they could become an important feature of the relationship between Hong Kong and China.

Outlook

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5. On the assumption that China's exports to Hong Kong will continue to grow slightly faster than exports to other markets and that invisible earnings from Hong Kong and the rest of the world will respond rapidly to China's new commercial attitudes, there could be a slight increase in the share of China's total convertible currency earnings through the colony up to 1985. Earnings from Hong Kong will continue to grow steadily and there seems no prospect of any significant diminution in Hong Kong's importance to China in the foreseeable future.