TNAG-1942-FCO40-2768-Internal-economic-situation-in-Hong-Kong-1989 — Page 51

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by about 3% and 6% respectively. As a result,

the relative importance of the United States as

a market for Hong Kong's domestic exports fell

to 29% in the first quarter of 1989, from a high

of 47% in the third quarter of 1985.

6.

Re-exports rose by about 34% in real

terms between the first quarter of 1988 and the

first quarter of 1989. In the first quarter,

61% by value of total exports were re-exports,

compared with 54% a year earlier. This rapid

shift was attributable partly to the flourishing

entrepôt trade with China and with the

Asia-Pacific region generally, and partly to

increased outward processing activities. Over

the same period, imports grew by about 26%, and

retained imports by about 19% in real terms.

7.

A visible trade deficit of $6, 982

million, equivalent to 5% of imports, was

recorded in the first quarter of 1989. This

compares with a deficit of $1,829 million,

equivalent to 2% of imports, recorded in the

same quarter last year.