TNAG-1873-FCO40-2661-Relations-between-Hong-Kong-and-China-1989 — Page 24

CONFIDENTIAL

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3.

Neither China nor South Korea publish reliable estimates of the amount of indirect trade between

themselves. The best estimate so far available is from the Hong Kong's trade statistics which include re-exports broken down by sources and markets. Indirect trade is thus defined as re-exports of China origin to South Korea and re-exports of South Korean origin to China.

4.

In 1988 Hong Kong's total re-exports amounted to HK$275 billion. Indirect trade between China and South Korea amounted to HK$16.1 billion or 5.9% of the total. In 1979 - the year when China started to open its door to foreign trade and investment it was only HK$0.1 billion

or 0.7% of the total.

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Re-exports of China origin to South Korea

5.

Of

In 1988 re-exports of China origin amounted to HK$132 billion or 48% of Hong Kong's total re-exports. re-exports of China origin, HK$6.6 billion or 5% were re-exported to South Korea. This newly industrialised country is becoming more important to China, inasmuch as the value of re-exports of China origin to South Korea was only HK$0.1 billion or 2% of Hong Kong's re-exports of

China origin in 1979. There has, thus, been an average

annual growth rate of nearly 60% in money terms.

CONFIDENTIAL #2

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