.6. In addition, there is now a large and growing investment by Hong Kong companies in China. Hong Kong is by far the largest source of external investment in China, accounting for about two-thirds of the total. Investment by Chinese banks and trading entities in Hong Kong is also. large and growing. It has been estimated that in the province of Guangdong, adjacent to Hong Kong, there are now at least 1.5 to 2 million workers employed directly or indirectly by Hong Kong firms, more than the total number employed in the manufacturing sector in Hong Kong itself. Some estimates are far higher. At the same time, there has been a huge growth in travel between Hong Kong and the mainland. Each year Hong Kong
people now make more than 12 million visits to China and some
750,000 overseas visitors travel to China through Hong Kong. large and growing volume of trade, manufacturing, investment and tourism is creating strong links between the Hong Kong economy and that of southern China, for which Hong Kong is now acting as an economic and financial link with the rest of the world.
This
THE DETERMINANTS OF ECONOMIC GROWTH
17.
The extraordinary growth of the Hong Kong economy did not happen by chance. Certainly there were important factors in Hong
Kong's favour. Considerable commercial, trading and financial
experience had accumulated in the territory over more than a hundred
years. There was also Hong Kong's favourable georgraphical location
on the edge of China and the Pacific Basin, which has provided it
with efficient connections to all the major world markets. Of crucial importance, however, has been the maintenance of consistent
economic and financial policies within the framework of a stable
governmental and legal system.
18. In particular, the existence of a free port and a free trade policy has been the bedrock of Hong Kong's economy. This has ensured that all sectors of the economy are subject to, and have to adapt to, the forces of the world market and that, consequently, its
resources are used in the most efficient and most productive ways.
It has helped to ensure a faster rate of economic growth and higher standards of living than would have been the case with a less market orientated policy. A recent study of developing countries, using
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