The role of Hong Kong as a trading partner is discussed broadly in Chapter 2. This chapter will examine the relative participation of Hong Kong in China's exports and imports by commodity categories. The role of Hong Kong in helping China to circumvent barriers to trade will be examined, as will the future prospects of China's direct exports to Hong Kong and Hong Kong's domestic exports to China.

Hong Kong's share in Chinese trade by commodity

Table 6.1 summarizes Hong Kong's share of Chinese exports by commodity. Chinese exports to Hong Kong are divided into exports retained in Hong Kong and exports re-exported through Hong Kong. Hong Kong does not publish statistics on the commodity composition for re-exports by country of origin, but they can be obtained from the Census and Statistics Department. Such statistics are necessary to compute the commodity composition of Chinese exports (i) retained in Hong Kong, and (ii) re-exported through Hong Kong. The many studies on the significance of Chinese exports in the Hong Kong market have unfortunately tended to estimate the commodity composition of Chinese merchandise retained in Hong Kong instead of obtaining correct data from the Census and Statistics Department; such estimates are inaccurate. In the Appendix, Census and Statistics Department data are compared with the estimates of two well-known studies, the first by Hsu (1983) and the second by Hsueh and Woo (1981).