TNAG-2293-FCO40-3305-Official-visits-from-Hong-Kong-to-China-1991 — Page 64

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Proposals

in excess of this amount would need to be vetted

and approved by MOFERT.

6.

On trade between China and Hong Kong, MOFERT

expected the present relationship of mutual reliance and

support to continue. Statistics had shown that China and

Hong Kong had been each other's largest trading partner

since 1987.

This had been due mainly to the increase in

the volume of

re-exports originating from or destined for

China passing through Hong Kong. At the same time, an

increasing number of Hong Kong manufacturers had switched

their production process into China.

As China would

continue to open up to foreign investment and Hong Kong was

strategically located to take advantage of this, trade

relations between the two partners would likely be further

strengthened during the next decade.

7.

Macao

On foreign investments in China, Hong Kong and

companies had consistently been the largest investors

and, since 1979, had accounted for some 61% of such

investments. During the first half of 1991, some 3,290

companies from Hong Kong and Macao had been given approval

to invest in China.

The average investment per company

however had not been particularly large. Since 1989, the

amount was approximately US$780,000.

8.

Since

undergone three

trade channels

1978, China's foreign trade system had

phases of reform. Between 1978 and 1987,

enlarged and foreign trade operation

were