is shipped as re-exports of finished products with no further processing required in Hong Kong. This explains the growing importance of re-exports in our total trade. In 1991, they reached a record 70% of the overall exports. The exceptional expansion of our re- exports demonstrates their competitiveness on world markets, and I believe that this encouraging trend will continue.
Hong Kong's Exports
(at current prices)
HK$ Billion
800
700
Re-exports
600
Domestic Exports
500
400
300
200
100
T
18.
0
1980
1981 1982 1983 1984 1985 1986 1987 1988 1989 1990 1991
The growing importance of re-exports in our total trade
Year
Against this background, I expect total exports to grow by 14% this year, with re-exports increasing by 20%. Domestic exports will perform more moderately, with growth predicted at only 2%. This slower rate of expansion is not surprising. It reflects the success with which our manufacturers have relocated operations in Guangdong province in their search for growth. It also reflects the constraints on industrial growth in Hong Kong caused by the shortages of land and, more especially, of labour.
19.
There is also another factor at work: the switch from manufacturing to service activities. Our services sector supports a substantially larger volume of exports, and has generated important new sources of export earnings which should not be overlooked.
20. As always, we cannot take world markets for granted. There are protectionist clouds on the horizon, although in preparing the budget forecasts I have assumed that we will be able to successfully defend our access to export outlets during 1992. We attach much importance to the Uruguay Round of multilateral trade negotiations and vigorously support efforts to achieve the maximum liberalisation possible for world trade.
21. A more immediate anxiety, however, is trade relations between China and the United States. Hong Kong is not directly involved in these negotiations. But the territory has a great deal at stake because of our heavy investments in China, the manufacturing
6
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