TNAG-1268-FCO40-1617-China-s-economic-relationship-with-Hong-Kong-Shenzhen-econom-1983 — Page 40

G.F. 326

ITAL 1x I

10.

Apart from tourist expenditure, Hong Kong

appears to be a net exporter of such services as shipping, transportation, insurance, freight handling, banking and advertising to China. Unfortunately, good quality information about service transactions does not exist. However, if it can be

G

assumed a very heroic assumption that the total net receipts from these services will offset about - 20% of Hong Kong residents' expenditure in China, the

invisible trade balance between Hong Kong and China

in 1982 would have been in the latter's favour by

about HK$2,507 million (US$413 million). On the same basis, the corresponding figure for 1981 would have

been HK$2,291 million (US$410 million).

(c) Remittances and other unrequited

transfers

11.

Concerning the value of money and gifts

remitted to China by Hong Kong residents, only very

fragmentary information is available. In his recent paper "Hong Kong's Role in Financing China's Modernization", Dr Jao suggested that money and gifts

remitted to China amounted to about 3% of Hong Kong's gross domestic product during the 1970s and he was of the opinion that this proportion had remained fairly stable throughout the period. Given that the economy of Hong Kong grew rapidly in the 1970s and also taking into account of inflation, on this basis the value of money and gifts remitted to China, in terms of HK$, would have increased by more than three times during the 1970s, from HK$755 million (US$125 million) in 1971 to HK$3,389 million (US$681 million) in 1980. Applying the 3% criteria to the value of GDP in 1981 and 1982, the value of money and gifts

remitted to China by Hong Kong residents in 1981 and

1982 would be HK$4,121 million (US$737 million) and HK$4,719 million (US$777 million) respectively

(Table 3).

CONFIDENTIAL #B