TNAG-1457-FCO40-1981-Relations-between-Hong-Kong-and-China-1986 — Page 68

19

importance of capital goods,

semi-manufactures increases.

shift has already started (3),

45.

and of raw materials and

There are signs that such a

Given that Hong Kong's domestic exports and re-exports to China have grown very rapidly in the past few years, a period of slower or even negative growth is not surprising. An important message from the plan is that China's more liberal economic policies have not been changed. Hence, Hong-Kong-should be ready to contribute and benefit. substantially after the re-adjustments have succeeded in steering the Chinese economy back onto a more stable growth path.

(3) According to Hong Kong trade statistics, machinery and

parts accounted for about 10% of Hong Kong's domestic exports to China in 1985 and such exports have shown uninterrupted growth in the past few years.

Economic Analysis Division Economic Services Branch Government Secretariat 27 March 1986

G.F. 326

CONFIDENTIAL #3