This study will examine the trade relations between the People's Republic of China (P.R.C.) and Hong Kong, hypothesizing that the future trade relationship with each other will be maintained and will not be changed in the near future due to the P.R.C.'s need for foreign exchange and Hong Kong's need for foodstuffs. It is further hypothesized that this economic coexistence situation will continue to exist regardless of the P.R.C.'s direct trade with the West. First, a description and analysis of the growth and development of the P.R.C.'s foreign trade with Hong Kong will be presented. Second, the role of Hong Kong's trade with the P.R.C. and their trade relationship will be evaluated. Lastly, opinions and insights will be given regarding the potential trade relationship between the P.R.C. and Hong Kong in the near future. Hong Kong's present significance in the P.R.C.'s trade is the role she plays as a major source of foreign exchange for the P.R.C, which is the result of the trade imbalance and the remittance from overseas Chinese. As the P.R.C. continues to do more business with the West, she has to obtain more foreign exchange to fulfill the payments. Therefore, the tie between the two trade partners is expected to strengthen and will not be changed in the foreseeable future. / Business, Sauder School of / Graduate