TNAG-1624-FCO40-2238-Relations-between-Hong-Kong-and-China-1987 — Page 160

CONFIDENTIAL B

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(9)

Hong Kong overtook Japan to become China's largest trading partner in the first half of 1987, accounting

for about 35% of its total exports and 19% of its

total imports (paragraph 30). However, more

information is needed to confirm this position.

(10) Financial links between Hong Kong and China have

increased further. Apart from the traditional

borrowing activities, China-related organisations are showing greater interest in tapping funds through Hong Kong's capital market (paragraphs 33 to 35).

(11) Hong Kong figured prominently as the major

contributor of direct foreign investment in China in

the first half of 1987. At the same time,

China-related companies have continued to expand and

diversify their activities in Hong Kong (paragraphs

36 to 39).

G.F. 326

CONFIDENTIAL #