ENG-1995 — Page 80

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THE ECONOMY

Index

Output per employee in the manufacturing sector (March 1991 = 100)

0

1985 1986 1987

1988

ה

1989 1990 1991

1992 1993 1994

1995*

Output per employee in the manufacturing sector has been on a general uptrend over the years. * Average of Q1 to Q3 1995 only.

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In 1995, the total value of visible trade between Hong Kong and China continued to grow strongly, by 15 per cent to $987 billion. China was Hong Kong's largest trading partner, accounting for 35 per cent of Hong Kong's overall trade value. It was also the largest market for, as well as the largest supplier of, Hong Kong's re-exports. About 88 per cent of Hong Kong's re-exports involved China in either direction.

Hong Kong also serves as an important service centre for China generally and South China in particular. This includes facilities such as the port and airport, as well as a wide range of financial and business services. Furthermore, Hong Kong is a convenient gateway to China for business and tourism. In 1995, 26 million trips to China were made by Hong Kong residents, and another two million trips to China were made by foreign visitors through Hong Kong. These represented increases of seven per cent and six per cent, respectively, over 1994.

Besides visible and invisible trade, Hong Kong is also an important source or conduit of external direct investment in China, accounting for about three-fifths of the total. While Hong Kong's direct investment in China has been concentrated in light manufacturing industries, investment in hotels and tourist-related facilities, real estate and infrastructure has been increasing. As can be expected, Guangdong Province occupies an important position in this respect. More than four million people are estimated to be working in Guangdong for Hong Kong companies, either through joint ventures or in tasks commissioned by Hong Kong companies in the form of outward processing arrangements and compensation trade. This, in effect, provides Hong Kong with a substantial production base across the border.