BRIEF 10
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Recognising Hong Kong's legacy of experience, the Chinese naturally wish to capitalize on this valuable asset. The People's Republic is investing in Hong Kong, making use of the territory as a port, and as a source of financial and other services, and has also allowed the two mainland provinces closest to Hong Kong, Guangdong and Fujian, a measure of economic autonomy encouraging them to develop at a faster pace. The advent of this element of autonomy, (which has led to the designation of Special Development Zones in these two provinces), together with the adoption of certain capitalist ideas, such as credit, and the adoption of elements of a market economy, have led to the Chinese looking at Hong Kong as a commercial testing-ground for some of their new ideas. Hong Kong can now be a useful springboard for projects in China ranging from small local projects in the Guangdong development area to China-wide projects in which Hong Kong is used as a base or a source of finance.
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As Hong Kong's importance in the People's Republic's external trade increases, Hong Kong's imports from China (her second largest supplier) have grown steadily, rising by 43% to £136m 1979 and by a further 54% in the first quarter of 1980. Domestic Hong Kong exports to China increased by 644% in 1979 to £54m and re-exports to China of goods imported into Hong Kong from the rest of the world grew by 514% in 1979 to £28m.
TRIANGULAR TRADE: CHINA/HONG KONG/UK
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Total UK re-exports from Hong Kong in 1979 were £34m ranking the UK in 15th place in a table of nations re-exporting from the Hong Kong market. In the first 3 months of 1980, re-exports of £26m brought the UK to 7th place. China was the principal importer of these re-exports, followed by USA, Japan and Taiwan..
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With the setting up of the Special Enterprise Zones in the provinces adjoining Hong Kong, the way has been opened for a number of joint ventures between Hong Kong companies and the People's Republic. According to Chinese estimates, 2,000 commercial agreement were signed during 1979 involving some kind of contractual co-operati In Guangdong Province there are now some 1,200 co-operative ventures valued at £105m. The great majority of these deals perhaps 80% -
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