SECRET
oup Semeth of Stake
་་་ ་་་
es
Private Secretary
FROM RD CLIFT, HKD DATE: 2 September 1983
АКК
09011
л
Them
L
cc: PS/Mr Luce PS/PUS
Hola
Mr Giffard
Mr Hallett, ESID
HONG KONG: ECONOMIC EFFECT ON CHINA OF A SHORT TERM DECLINE IN CONFIDENCE
1.
You asked how China might be hit if there were a rapid decline in confidence and particularly a fall in the Hong Kong dollar. This can be considered under two heads: Chinese Foreign Exchange Earnings from Hong Kong (Visibles and Invisibles): and Capital Investments.
Foreign Exchange Earnings
In 1982 China's total exchange earnings from Hong Kong, excluding re-exports, were estimated at US$4,750 million. It is not known exactly how much of this was in Hong Kong dollars but US$4,000 million would be a fair estimate. A 10% drop in the value of the Hong Kong dollar would thus lose China US$400 million per year.
China's Capital Investments in Hong Kong
In 1982 the total capital value of Chinese owned real estate in Hong Kong was US$1,099 million. This would rise or fall according to the value of the Hong Kong dollar, eg a loss of US$109 million for a 10% drop.
R D Clift
2 September 1983
Hong Kong Department
SECRET
No comments yet.
Private notes are available after approval.