TNAG-1821-FCO40-2584-Emigration-from-Hong-Kong-1988 — Page 195

- 6 -

Thirdly, it is worth examining the vested interests

riding on the success of Hong Kong. The interests of the

people of Hong Kong in this are obvious.

Perhaps less obvious

to some overseas observers is the strong Chinese interest that

Hong Kong should continue to prosper as it does now. Hong Kong

is China's largest market and its second largest trading

partner. It is China's largest source by far of direct

external investment and joint venture investment (in the seven

years 1979-1985, 60% of China's external investment came from

Hong Kong). It is a vital entrepot for Chinese exports, and a

service centre for China as well as other countries in the

region. The vast numbers of Hong Kong people travelling to

China (over 22 million border crossings in 1986, compared with

around half a million in the mid-seventies), and remittances

sent to relatives in China by Hong Kong residents are also

valuable sources of income for China.

Chinese investments in Hong Kong are large and

growing. They have overtaken British investments in the

manufacturing sector, and are now exceeded only by American and

Japanese. Chinese interests control fifteen banks and numerous

other companies in Hong Kong,. A Chinese company bought a

significant minority shareholding in Cathay Pacific Airways

earlier this year, and is participating in a consortium that is

building a HK$3 billion second cross-harbour tunnel. Estimates

of what China earns from Hong Kong range from thirty to forty

percent of China's total foreign exchange receipts. These

·Page 196