TNAG-2501-FCO40-3639-Relations-between-Hong-Kong-and-Commonwealth-countries-1992 — Page 28

CONFIDENTIAL

General Trends

11. The increased activity between the two countries had a marked effect on trade figures in 1985, when total trade between China and Singapore reached US $2.6 billion, an increase of 60 per cent over the previous year. China moved into the position of Singapore's fourth largest trading partner. 1984 figures had already showed a dramatic (nearly two-thirds) increase in Singapore's imports, compared with 1983. The import in 1984 of US $609 million of crude oil accounted for much of

of this increase and brought total imports from China in 1984 to US $1.35 billion (4.7 per cent of Singapore's total imports). Overall trade with China rose in 1984 by 74 per cent to US $1.6 billion. Total exports from China

from China to Singapore in 1985 stood

stood at US

US $2.3 billion, of which mineral fuels constituted 78 per cent. In light of the agreement concluded in January 1986 on the reduced volume of exports of Chinese crude oil for refining in Singapore, the trade figures for 1986 may show a dip from 1985.

12. Singapore's exports to China showed a modest increase in 1984, 15.5 per cent over 1983, and a more rapid rise in 1985, 36 per cent over 1984.

The main products exported are rubber and natural gums. Nearly 40 per cent of Singapore's exports to China

to China in 1984 and 55 per cent in 1985 were accounted for by exports produced in Singapore as opposed to re-exports (see Table 3).

13. While Singaporeans, and indeed foreign companies in Singapore, see China as a potentially huge new market, most are realistic about the immediate prospects.

Joint ventures and foreign-exchange generating investments in China are seen as the safest ways to make profits. China is evidently attracted by the kind of economic cooperation Singapore is able and prepared to offer, but the PRC's shortage of foreign exchange and reimposition of a larger measure of central control over foreign trading activities will restrain any very rapid expansion of trade.

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CONFIDENTIAL