HONG KONG AND UK-CHINA TRADE
This paper is one of a series of Background Papers, available from the Department of Trade's China/Hong Kong Unit, which expand on specialist aspects of trading with China. It assumes knowledge of, and should be read in conjunction with, "How to sell to China" which is the main basic guidance paper, also issued by the Unit.
It does not deal with the merits of, and excellent prospects for, UK Trade with Hong Kong. Advice on trade with Hong Kong is available separately from the China/ Hong Kong Unit.
The China/Hong Kong Unit is at the Department of Trade, 1 Victoria Street, SW1H OET and the enquiry point telephone numbers are:-
China Hong Kong
215 5252 215 3661
It is 1. Hong Kong has for many years been China's window on the western world. 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.
China/Hong Kong Trade
2.
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.
3. 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 contact and its deep water harbour provided entrepot port facilities for Chinese shipments.
This
4. The Chinese naturally wish to capitalize on the valuable asset of this fund of experience, particularly in her struggle to modernise and obtain the foreign exchange to finance this. 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. autonomy, (which has led to the designation of Special Economic Zones in these two provinces), together with the adoption of a more market-oriented economy and a willing- ness to consider all internationally accepted types of foreign trade have led to the Chinese looking at Hong Kong as a commercial testing-ground for some of their new ideas. One result of China's new economic relationship with Hong Kong is that Hong Kong may now provide 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.
*All sums are given in £ sterling only, at annual average exchange rates for 1979 of HK $4.93 US $1 and US $2.15 = £1.
-1-
No comments yet.
Private notes are available after approval.