CONFIDENTIAL # 2
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26.
According to some informal reports, the control
over Shenzhen and Zhuhai with respect to their foreign exchange spending was partially lifted in late June 1985.
This suggests that China still thinks liberal foreign trade policies are the correct ones to pursue and has no intention of repudiating external commitments previously
entered into. However, the recent restrictions on imports
have already caused damage to many China traders and it is
unlikely that these restrictions will be significantly
relaxed in the next year or so.
Implications for the Hong Kong economy
27.
(a) Importance of China as a market for Hong
Kong's domestic exports and re-exports
Benefitting from China's import boom, Hong
Kong's domestic exports and re-exports to China
experienced tremendous growth in 1984 and in the first
half of 1985, as the following table shows:
Hong Kong's
domestic exports to
Period
China (HK$Mn)
Growth rate*
(*)
Hong Kong's re-exports to China
(HK$Mn)
Growth rate*
(8)
1st half 1984
4,533
82
10,260
139
2nd half 1984
6,750
81
17,804
126
1984
11,283
81
28,064
130
1st half 1985
7,918
75
24,638
140
*
Source: Hong Kong Trade Statistics
Over previous year or same period of previous year
G.F. 326
CONFIDENTIAL # 3
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