TNAG-1457-FCO40-1981-Relations-between-Hong-Kong-and-China-1986 — Page 205

sign of the retraction. being liited, which is hardly surprising given the continuing out tow of foreign exchange. The Chinese Governtent has also ut capital spending on production line equipant which requires

continued imports of components and sub-assemblies. Starting from September, permits must be obtained from the MOFERT before production lines for seven types of consumer durables (including private motor vehicles, television

sets, washing machines, refrigerators and air

conditioners) can be introduced into China.

15.

Analysed by products, domestic exports to China of telecommunications, sound recording and reproducing

apparatus, which achieved a growth rate in money terms of 155% in the first quarter of this year over the first

quarter of 1984 and 79% in the second quarter, declined by 13% in the third quarter. Domestic exports of office machines and automatic data processing equipment, which grew by 1,789% in money terms in the first quarter and 362% in the second quarter, declined by 33% in the third quarter. Domestic exports of miscellaneous manufactured articles, electrical machinery and photographic apparatus all recorded lower growth rates in the third quarter as compared with those achieved in the first half of 1985; only textile yarn showed a higher growth rate in the third

quarter. Re-exports of telecommunications and sound recording apparatus, electrical machinery, office machines, road vehicles and textiles yarn all recorded significantly lower growth rates in the third quarter as

compared with those achieved in the first half of 1985.

G.F. 326

CONFIDENTIAL # 3