M
BRIEF 10
BRIEF FOR THE MINISTER FOR TRADE'S VISIT TO HONG KONG
30 AUGUST 5 SEPTEMBER 1980
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HONG KONG/CHINA TRADE
1
Following the launch by the Chinese Government of its
Four Modernisations Programme and its public acknowledgement of
the role of Hong Kong in China's economic development, more attention is being focussed on Hong Kong.
2
Hong Kong has for many years been China's window on the western world. It is China's largest export market, a channel for re-exports to countries where direct trade is difficult, a channel for transmission of overseas remittances, a centre for trade contacts export promotion and commercial intelligence, a base for expanding industrial, financial and commercial operations by Chinese controlled enterprises, and a source of investment and expertise for developing
China's industries.
3
China's trade surplus with Hong Kong is around £735m*, including re-exports. Together with invisible earnings and other capital transfers estimated at around £315m, Hong Kong accounts for something like one-third of China's total annual convertible currency earnings.
4
Hong Kong has long experience of doing business with China. Throughout the period of China's isolation from the outside world, Hong Kong banks, insurance companies and shipping houses provided services essential to China's external economic relations, while its well-established agency trading houses enabled China to maintain overseas business contacts and its deep water harbour provided entrepot port facilities for Chinese shipments.
*
£ sterling at the exchange rate obtaining on 8 August 1980
of £1 = HK$11.66 = US$2.37
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