TNAG-1621-FCO40-2235-Relations-between-Hong-Kong-and-China-1987 — Page 124

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G.F. 326

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12

Hong Kong's exports to China

#

Domestic Growth

Growth

exports

rate

Re-exports

rate

(HK$Mn)

(%)

(HK$Mn)

(8)

1985 Q1

3,912

97

11,812

149

Q2

4,006

57

12,826

132

Q3

3,604

22

10,940

51

Q4

3,667

-3

10,445

- 1

Annual

15,189

35

46,023

64

1986 Q1

3,136

-20

7,964

-33

Q2

4,213

5

9,664

-25

Q3

4,855

35

10,276

-6

Q1

Q3

12,204

6

27,903

-22

# in money terms

20.

Domestic exports to China started to pick up in

the second quarter of 1986 and grew strongly in the third

quarter. At a value of HK$4,855 million in the third

quarter, these domestic exports were 35% higher than in

the same quarter last year. A growth of such a magnitude

is impressive considering that China's import controls

still remain in force. It is likely that a significant part of this growth was related to increased outward processing activities commissioned by Hong Kong

manufacturers, in line with the strong demand for Hong

Kong's products overseas. Moreover, the strong Yen may have induced China to switch from Japanese imports to cheaper imports from other sources, such as Hong

CONFIDENTIAL #