TNAG-1624-FCO40-2238-Relations-between-Hong-Kong-and-China-1987 — Page 174

CONFIDENTIAL # Z

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tender

(10)

According to the Shenzhen authorities,

encouraging competition in land acquisition is conducive

to the efficient use of land resources. Moreover, it is

expected that land disposal through public bidding would

help to increase the revenue of the local government.

However, technical complications in land transactions,

coupled with ideological debates over the disposal of

state-owned land, have apparently held up the

implementation of this reform

(11)

Visible trade between Hong Kong and China

(all growth rates being expressed in money terms)

21.

China remained Hong Kong's largest trading

partner in the second quarter of 1987. Total visible

trade between Hong Kong and China, at HK$90,723 million

(US$11,631 million) in the second quarter, increased by

52% over the same quarter in 1986.

22.

China remained the second largest market for

Hong Kong's domestic exports and the largest market for

Hong Kong's re-exports in the second quarter of 1987.

Domestic exports to China accounted for 14% of Hong Kong's

total domestic exports in the second quarter of 1987,

compared with 12% in the second quarter of 1986.

Re-exports to China accounted for 33% of Hong Kong's total

re-exports in the second quarter of 1987, the same as in

the second quarter of 1986.

(10) According to the Chinese Constitution, all land is

owned by the state. Thus, only part of the land use rights can be assigned. Also, the leasehold will cover a specific period.

(11) According to a recent report, the first plot of land under the new system has just been disposed of.

CONFIDENTIAL #