TNAG-2979-FCO40-1471-Trade-relations-between-Hong-Kong-and-China-1982 — Page 6

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FM PEKING 07884MZ JUN 82

TO IMMEDIATE FCO

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TELEGRAM NUMBER 319 OF 7 JUNE

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HKK 121/9/

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INDEX

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INFO IMMEDIATE HONG KONG, BTC HONG KONG

No

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YOUR TEL 420 (NOT TO BTC HONG KONG): EXPORT DUTIES

1. XINHUA FOR 27 MAY GIVES RELEVANT DETAILS. MINISTRY OF FOREIGN ECONOMIC RELATIONS AND TRADE COMMENT THAT THE DUTIES ARE TO PREVENT DIFFERENT BRANCHES OF EXPORT CORPORATIONS UNDERCUTTING EACH OTHER BY OFFERING HIGH VALUE COMMODITIES FOR SALE AT LOW COSTS, IN SOME CASES AT PRODUCTION COST.

2. THIS HAS BEEN A PROBLEM FOR THE CHINESE SINCE AT LEAST SPRING

1980. THESE NEW DUTIES ARE PRESUMABLY CONNECTED TO THE CURRENT

POLICY OF STRESSING PLANNRFG AS THE MAIN METHOD OF ECONOMIC

CONTROL WITH QUOTE MARKET ADJUSTMENT UNQUOTE SECONDARY. THEY ARE

LINKED TO THE PREVIOUS DECISION TO CENTRALISE AUTHORISATION FOR

THE EXPORT OF CERTAIN IMPORTANT COMMODITIES (SEE CHINA DAILY OF

21 MAY). IT REMAINS TO BE SEEN HOW EFFECTIVE THEY WILL BE AND

WHETHER THEY WILL DAMAGE CHINA'S EXPORT DRIVE. APPARENTLY THE

DUTIES DO NOT APPLY TO CONTRACTS SIGNED BEFORE 1 JUNE, THE

IMPLEMENTATION DATE.

CRADOCK

MINIMAL

HK&GD

FED

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