G.F. 326
CONFIDENTIAL # 2
21
46.
As the economic relations between Hong Kong and China have become increasingly close and China is now the second largest market for domestic exports and the largest market for Hong Kong's re-exports, developments in China have a significant bearing on the economy of Hong Kong. The recent consumption and import boom of China has brought about substantial growth in Hong Kong's domestic exports and re-exports to China, the measures newly adopted by China to restrict its imports will certainly have adverse effects on the performance of Hong Kong's exports to China in the coming months.
47.
Hopefully, such adverse influences will diminish once economic order is again restored in China. At a time when the performance of Hong Kong's domestic exports to other countries is not very satisfactory, the slowing down in the growth rates of domestic exports and re-exports to China is especially undesirable. Other sectors like trade-related financial services and communication services could also be adversely affected. However, it will be to Hong Kong's benefit if China's economy can enjoy stable growth and follow orderly developments.
48.
Notwithstanding that China's policy stance towards imports has shown dramatic changes since mid-1984, China apparently still considers liberal foreign trade policies are the correct ones to pursue and appears to have no intention of repudiating external commitments previously entered into. This is encouraging insofar as the longer item interests of China traders in Hong Kong are concerned.
Economic Analysis Division Economic Services Branch Government Secretariat 18 October 1985
CONFIDENTIAL # 3
No comments yet.
Private notes are available after approval.