TNAG-2242-FCO40-3223-Most-favoured-nation-status-for-China-impact-on-Hong-Kong-1991 — Page 90

FCO40 Hong Kong Department Records 聯邦事務部香港部檔案 All

G.F. 324

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G

some Chinese

goods

passing

through Hong Kong in transit

be affected.

thooo

which are not shown in Hong Kong's trade figures would also

Applying a probably conservative multiplier

of, say, 1.8* to the minimum 1༠ss to account

related impacts, the combined loss would amount to HK$7-10

billion (US$0.9-1.2 billion) or 1.3% to 1.8% of the overall

GDP.

The loss in employment would be in the range of

༢༡ ༡༩༠

4༣ 000

12.

While the 108s in GDP may appear small in

percentage terms it has to be seen against the trend grouth rate of the economy, which is projecteA to he ང

per

annum over the medium term. Hence the direct impact would

be

to curtail this growth rate by as much as one-quarter to one-third in the initial year. In the subsequent years,

the adverse impact on the GDP growth rate is expected to lessen as the shock filters through. But as the growth

rate of re-exports from China to the United States i a unlikely

be as fast as previously in the absence of the

MFN status for China, some negative effect would still

to

nersist

(B)

Indirect impacts

13.

Removal of China's MFN status by the United

States would almost certainly damage the trade relations

between the two countries. In consequence. China would probably cut back on its imports from the United States.

In 1990, Hong Kong's re-exports of US origin to China amounted to HK$10.3 billion (US$1. ༣ hillionl comparison, this is about one-eighth of the value of Hong

Kong's re-exports of China origin to the liniton Starac

RV

(*) Of the additional impact represented by the factor of

0.8,

0. 3 is assumed to be attributed to (a) and (c), and 0.5 to (b). These assumed figures are broadly in line with anecdotal information derived from the relevant economic surveys.

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