TNAG-1621-FCO40-2235-Relations-between-Hong-Kong-and-China-1987 — Page 55

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3.

The concept of a "port-hinterland relationship"

may be used to describe the rapid growth in trade between

Hong Kong and southern China. The effective hinterland of

Hong Kong will be extended to the north after the

double-tracking of the Beijing-Guangzhou Railway and of

the Guangzhou-Shenzhen Railway has been completed.

4.

The concept of a "metropolitan-fringe

relationship" may be applied to Hong Kong's growing

economic relations with cities and counties in the Pearl

River Delta region, including the Shenzhen and Zhuhai Special Economic Zones, although an "inter-city relationship" is probably a more appropriate description

of Hong Kong-Guangzhou relations. In respect of

manufacturing activities, factories in the Delta region are involved in various forms of compensation trade and outward processing arrangements commissioned by Hong Kong manufacturers. The river, rail and road transport links

in the region provide feeder services by which foodstuffs

and other consumer goods are carried to Hong Kong to meet

its everyday needs. Moreover, these transport links serve to channel China's exports through Hong Kong's transport network into Hong Kong's container port and other shipping

outlets. They also serve as channels for China's imports

through and from Hong Kong.

Likely developments in the longer term

5.

In discussing likely developments in the longer

term, two political pre-conditions have been assumed.

First, it is assumed that China will continue to implement its economic reforms and open door policies with its

economic decision-making becoming more decentralized and its business operations more market-oriented, though it will remain basically a centrally planned economy.

Second, it is assumed that the Sino-British Joint

Declaration on the future of Hong Kong will be fully

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