CONFIDENTIAL
FM HONG KONG
TO DESKBY 2309OOZ FCO
TELNO 3577
OF 22105OZ SEPTEMBER 88
INFO DESKBY 23010OZ PEKING
CONFIDENTIAL
123677 MDHIAN 4892
HKB 011/8
23 SEP 1988
τό
TOP COPY Q DIST ?
N
MIPT MY ADDRESS TO LEGCO: ECONOMIC AND FINANCIAL SITUATION
BEGINS
THE CHINA DIMENSION
12. ONE KEY ELEMENT IN OUR ECONOMIC FUTURE IS THE GROWTH OF HONG KONG'S ECONOMIC RELATIONS WITH CHINA. CHINA IS NOW OUR
LARGEST TRADING PARTNER. WE IN TURN ARE CHINA'S LARGEST TRADING PARTNER. CHINA IS THE SECOND LARGEST MARKET FOR OUR DOMESTIC EXPORTS: THE LARGEST MARKET FOR OUR RE-EXPORTS: AND THE SECOND LARGEST SOURCE OF OUR RETAINED IMPORTS. ABOUT 80 PER CENT OF OUR RE-EXPORT TRADE IS ASSOCIATED WITH CHINA, EITHER AS A MARKET OR AS A SOURCE OF SUPPLY. HONG KONG IS ALSO THE MOST IMPORTANT SOURCE OF EXTERNAL INVESTMENT IN CHINA, ACCOUNTING FOR ABOUT TWO-THIRDS OF ALL THE EXTERNAL INVESTMENT REALISED.
13. ACCESS TO BUSINESS OPPORTUNITIES AND ECONOMIC RESOURCES IN CHINA HAVE BEEN MAJOR FACTORS IN SUSTAINING THE RAPID GROWTH OF OUR ECONOMY. NOT SURPRISINGLY, OUR NEIGHBOURING PROVINCE OF GUANGDONG PLAYS A VITAL PART IN THIS. IT HAS BEEN ESTIMATED THAT IN GUANGDONG PROVINCE ALONE THERE ARE BETWEEN 1.5 AND 2 MILLION PEOPLE EMPLOYED DIRECTLY OR INDIRECTLY BY HONG KONG BUSINESSES. THIS IS MORE THAN THE TOTAL NUMBER EMPLOYED IN THE MANUFACTURING SECTOR IN HONG KONG. AT THE SAME TIME, COMPANIES WITH MAINLAND INTERESTS ARE MAKING SUBSTANTIAL INVESTMENTS IN HONG KONG.
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14. WITH THE CONTINUATION OF THE OPEN POLICY CHINA'S ECONOMY SEEMS SET TO BECOME INCREASINGLY EXTERNALLY ORIENTED. THE PEARL RIVER DELTA REGION IN PARTICULAR SHOWS ALL THE SIGNS OF CONTINUING TO BE AN AREA OF HIGH GROWTH. I SEE HONG KONG AS HAVING AN IMPORTANT ROLE TO PLAY IN THE ECONOMIC DEVELOPMENT OF THIS HIGH GROWTH AREA OF SOUTHERN CHINA AND MORE WIDELY, OF CHINA AS A WHOLE. HONG KONG WILL BE NOT ONLY A SOURCE OF TRADE AND
INVESTMENT BUT ALSO AN ECONOMIC AND FINANCIAL CENTRE LINKING CHINA WITH THE REST OF THE WORLD. THIS WILL BENEFIT BOTH
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