TNAG-1624-FCO40-2238-Relations-between-Hong-Kong-and-China-1987 — Page 188

FCO40 Hong Kong Department Records 聯邦事務部香港部檔案 All

CONFIDENTIAL 機密

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that CITIC's total investment in Hong Kong now amounts to

about HK$5-6 billion

39.

(14)

Regarding infrastructural development, following

CITIC, the China Resources (Holdings) Ltd. has also showed

interest in the financing, construction and operation of

the Tate's Cairn Tunnel. The latter has announced its

intention to collaborate with the New World Development

Co. Ltd., Aoki Construction and Leighton Construction in

bidding for the tunnel.

Concluding remarks: Implications for the Hong Kong economy

40.

External trade was a bright spot in the Chinese

economy in the first half of 1987. However, the problems

associated with textiles and clothing exports have given

rise to some uncertainties about China's export prospects

in the second half of this year. There were reports that

the US embargo on Chinese textiles and clothing items has

resulted in some shift of orders to Hong Kong.

Notwithstanding a possible short-term gain, this could

have unfavourable implications for Hong Kong's trade with

China, if China proceeds to tighten up further its

controls on imports when its export performance worsens.

41.

In the first half of 1987, Hong Kong overtook

Japan to become China's largest trading partner. This

illustrates the growing economic ties between the two

places. As China's Customs statistics indicate, China

maintained a favourable trade balance with Hong Kong (and

Macau) in the first half of 1987, with its exports to Hong

(14)

This figure was disclosed by Rong Zhijian, managing director of CITIC, on 9 September 1987. It probably includes certain investment projects located outside Hong Kong, such as in China.

CONFIDENTIAL #

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