TNAG-2466-FCO40-3590-Economic-situation-in-Hong-Kong-1992 — Page 4

Hong Kong Government Office 香港政府駐英辦事處

6 Grafton Street London W1X 3LB

36

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Background Briefing Paper

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UK Trade with Hong Kong, 1991 (preliminary version).

As recorded in UK trade statistics, UK exports to Hong Kong increased by 12% in 1991, which was the second year where the growth rates were at double-digit level, as compared with the average growth rate of 5% in previous years. Imports from Hong Kong increased by 9% and, as shewn in Table 1, there was an improvement in the UK ratio of exports to imports in trade with Hong Kong.

2.

Hong Kong's trade comprises two major components. firstly, the export of goods manufactured in Hong Kong (domestic exports) and the import of goods for Hong Kong's own use (retained imports); secondly, the entrepot trade, comprising export of goods produced elsewhere (re-exports) and import of goods for re-export to other destinations. UK trade statistics (which are compiled on a country of consignment basis rather than according to the country of origin/ultimate destination) do not distinguish between these two different types of trade

Hong Kong trade statistics record the two components separately, as shewn in Table 2. There was a considerable increase in retained imports from the UK in 1991 and Hong Kong's trade surplus on direct trade with the UK declined. Entrepot trade increased in both directions by over 20% and in consequence Hong Kong's trade surplus also increased. By far the larger part (80%) of Hong Kong's overall trade surplus with the UK is in respect of entrepot trade rather than trade for Hong Kong's own account.

3.

Conventional trade statistics measure visible trade in goods. There are few statistics for invisible trade in services, and these usually measure only global trade, i.e. not bilateral trade. However some estimates of invisible trade are made by survey. In a recent article, the Senior British Trade Commissioner in Hong Kong stated: "The UK's invisible earnings in Hong Kong probably contribute as much if not more than (British) earnings from visible exports". On this basis, the UK's surplus on invisible trade with Hong Kong more than offsets any deficit recorded on visible trade.

4.

Hong Kong is the UK's second largest market after Japan in Asia. UK exports to Hong Kong were four times as much as to China and over half as much as to Japan. The latter has an economy nearly fifty times the size of Hong Kong.

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