TNAG-1268-FCO40-1617-China-s-economic-relationship-with-Hong-Kong-Shenzhen-econom-1983 — Page 81

G.F. 326

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PART VIII: CONCLUSION

50

TPX 古

64.

The economic relationship between Hong Kong

and China is such that the two economies are

inter-dependent and such inter-dependence has so far been proved to be of great mutual benefits. It is a

fair comment that China is of vital importance to Hong Kong particularly insofar as the supply of daily

necessities is concerned. On the other side of the

the coin, Hong Kong's economic value to China is of great, though not vital, importance, notwithstanding the fact that China is such a large continental

economy. China derives very considerable economic benefits from Hong Kong and such benefits will

continue only if the economy of Hong Kong continues to prosper and the Hong Kong dollar continues to be internationally convertible i.e. if people continue

to have full confidence in its convertibility. In

other words, on condition that Hong Kong remains a going concern, its economic value to China can be maintained and in all possibilities, can be further

enhanced. While economic benefits derived from Hong

Kong are not of vital importance to China (probably

nothing external can be considered vital to such a

large, self-contained, continental economy as China),

the loss of such benefits (either partially or wholly) would require very painful adjustment in China's economic growth and developments.

✓

CONFIDENTIAL #3