ABSTRACT
Hong Kong’s rise from rags to riches has been one of post-war Asia’s most amazing success stories. One might have expected Hong Kong’s exports to shrink once China itself plunged into the world market beginning in 1978. Hong Kong’s exports and reexports to China have grown more than a hundredfold since 1978; China has risen from being Hong Kong’s thirty-seventh-largest market to being its second largest in 1984. Hong Kong has thus been able to prosper while shifting its functions somewhat from manufacturing center to shipping entrepot. Since China’s opening to international trade and investment, significant quantities of Hong Kong capital have begun to migrate into China to take advantage of cheaper labor markets. Hong Kong’s top twelve trading partners, in addition to Taiwan and South Korea, include Saudi Arabia, South Africa, Singapore, and Indonesia, none of which has relations with Beijing.
