Jiangxi is part of the 'Pan-Pearl River Delta' closing to Hong Kong and with abundant resources. Jiangxi and Hong Kong have developed close trade relationships, for their economies are complementary to each other. The implementation of CEPA injects new vitality into the business cooperation between the two regions.

I. Jiangxi-Hong Kong business cooperation has a solid foundation

1.      Hong Kong is the most important trade partner of Jiangxi

Hong Kong is one of the most earliest export market of Jiangxi, which had begun to supply HK fresh and live stocks as early as 1957. In the past 40 years, Hong Kong has become the most important trade partner for Jiangxi. In the year 2003, Jiangxi-HK trade volume hits 416 mln USD, 16.5% of the trade volume of Jiangxi. Jiangxi's exportation to and importation from Hong Kong are 311 and 106 mln USD, accounting for 20.7% and 10.3% of the total exportation and importation of Jiangxi.

In recent years, the trade between Jiangxi and Hong Kong has the following characteristics:

A.     Jiangxi-HK trade soars

	Trade volume	Exportation	Importation
Annual Increase of Jiangxi-HK trade from 2001-2003 (%)	56.6	56.4	70
Percentage higher than increase of Jiangxi foreign trade (%)	28.2	36.1	25.9

B.     Jiangxi's high dependence on trade with HK

The proportions of Jiangxi's trade with HK/Jiangxi's foreign trade are higher than that of the mainland’s.

Year 2003	Trade volume	Exportation	Importation
Proportion of Jiangxi's trade with HK against Jiangxi's foreign trade (%)	16.5	20.7	10.3
Proportion of Mainland's trade with HK against Mainland’s foreign trade (%)	10.3	17.4	2.7

C.     Most of Jiangxi's export goods shipped to other markets via Hong Kong.

Jiangxi's export goods will be usually transported to Hong Kong via Shenzhen by land, and then be shipped to the destination ports.

D.     Most of Jiangxi's foreign trade partners have their HQ or branches in Hong Kong

Over 60% of Jiangxi's foreign trade partners are in Hong Kong. Through them, Jiangxi's products enter the markets all over the world. In the year 2003, the trading primary commodity and finished product between Jiangxi and HK is 12.8:87.2. The goods exported from Jiangxi to HK are garments and accessories, threads, machinery and electric goods, live pigs, while the importing goods are mainly waste plastics, steel, machinery and electric goods, waste iron and copper.

2.      Hong Kong is the most important FDI source of Jiangxi

Hong Kong is Jiangxi's first FDI source. The first foreign-funded enterprise set up in Jiangxi in the year 1984 was a mainland-HK joint venture. In the past 20 years, HK investment accounts for a large part of Jiangxi's FDI. By the year 2003, Jiangxi has approved setting-up of 4078 HK-invest enterprises, involving a contracted value 5.164 bln USD and actual utilized fund 3.136 bln USD. In 2003, HK launch 407 projects in Jiangxi, with contracted value 1.29 bln USD and actual utilized 0.88 bln.

In recent years, Hong Kong’s investment in Jiangxi has the following characteristics:

A.       Hong Kong's investment in Jiangxi rockets

	Projects in number	Contracted value	Actual Utilized Value
Annual Increase of HK's investment in Jiangxi from 2001-2003 (%)	58.96	126.52	95.23

B.       Proportion of increases for successive years

Hong Kong's investment in Jiangxi against HK's investment in Chinese Mainland (%)	Year 2001	2002	2003
Projects	1.83	2.79	2.98
Contracted value	1.3	2.69	3.18
Actual utilized fund	1.2	2.75	4.98

C.       Hong Kong is the important target of Jiangxi in attracting foreign investment

Jiangxi regularly holds events for attracting foreign investment in Hong Kong.

D.       Manufacturing is the key sector in HK investment attracting

In 2003, HK launch 247 projects in Jiangxi's manufacturing sector, with 607 mln USD contracted value and 386 mln USD actual utilized fund. And the actual utilized fund of real estate, social service and farm, forest, husbandry and fishing hit 249, 131 and 27.48 mln USD respectively.

Jiangxi, with the promotion of CEPA and the "Pan-Pearl River Delta"(PPRD) regional economic cooperation, is facing an excellent opportunity of development.

II the bright future of cooperation between Jiangxi and Hong Kong

The differences in resource condition, economic structure and development level between Jiangxi and Hong Kong actually enhance their economic cooperation potential, indicating the necessity of their cooperation and communication in order to get further development.

1.      Hong Kong has a typical metropolitan economy featuring no minerals，no agriculture resources and with its raw materials for industry, semi-manufactured goods and foods mainly depending on importation; Jiangxi is abundant in agriculture and minerals resources, with a great potential of exploitation.

2.      Hong Kong is lack of local labors, and with high labor, production and commercial costs; whereas Jiangxi has plenty of labor resources, esp. primary labors and other resources like water, electricity and gas, with low labor, production and commercial costs.

3.      Hong Kong, as an international finance center, is sufficient in capitals, having a healthy finance service system and great capacity of financing; while Jiangxi has been evidently restricted by its lacking in capital in economic development.

4.      Hong Kong, considered being at the post-industrialized phase of development, has a healthy structure of industry. Its tertiary industries account for over 80% of the GDP, with trade, finance and tourism as its pillar industries. Jiangxi, still making every effort to get itself industrialized, takes opening-up as its important policy for development. Linking both to the coastal cities and the mainland, Jiangxi becomes a base to receive the industrial transfer from Hong Kong and the coastal areas.

What is more, Jiangxi has great advantages in ecology and is trying to build itself as a garden of leisure for Hong Kong, Macao and other coastal cities in Eastern China. Its forest coverage rate is up to 59.7%, with four state-level scenery resorts and a series of national forest parks, including Mount Lushan, which is titled the United Nations Educational, Scientific and Cultural Landscape in the World Heritage List. Jiangxi is also abundant in water resources, among which the Poyang Lake is the No. 1 large freshwater lake in China.

II Jiangxi’s fast development in economy and infrastructure facilities such as transportation has greatly increased the speed of the flow of labor and information as well as logistics between the two regions.

1.      In 2001, 2002 and 2003, the GDP of Jiangxi have respectively increased by 8.8%, 10.5% and 21.5%; while its fiscal revenues up by 16.6%, 17% and 21.5% and its social fixed assets investment up by 20.4%, 40% and 49.3%.

2.      Moreover, the infrastructure facilities in Jiangxi have been greatly improved, which will greatly boost its economic cooperation and communication with Hong Kong. The province has a well-developed railway network. Major trunk railways include Jingjiu line (Beijing-Kowloon), Zhegan line (Hangzhou-Nanchang), Yingxia line (Yingtan-Xiamen), Ninggan line (Nanjing-Nanchang), Xiangjiu line(Xiangtang-Jiujiang), Xiangji line (Xiangtang-Ji'an) and Wujiu line (Wuhan-Jiujiang), etc. It has also established a comprehensive highway network including the Jiujiang-Jingdezhen Expressway and the Ganyue Expressway linking Nanchang, Ji'an and Ganzhou with Guangdong province. Among the total length of 37,318 kilometers, 30.48% are of the first or second classes. Almost all the county-level areas have asphalt roads and all the towns have been open to traffic. There are five airports in the provinces, locating in Nanchang, Jiujiang, Jingdezhen, Ji'an and Ganzhou.  Chartered flight from Nanchang to Hong Kong is available. The 4D-level Changbei Airport in Nanchang forms the air transportation net with the airports in Ganzhou, Jingdezhen, Jiujiang, and so on, hence accelerating Jiangxi's opening-up to the outside world.

Facing a bright future of regional development, the government of Jiangxi has held three investment promotion activities in Hong Kong to further search and promote the regional cooperation and development with the finance center.

Editor: Catherine