MORE than 43 per cent of Hong Kong's exports to China were for outward processing during the first three months of this year, the Government said yesterday. Of this total, 69 per cent were for domestic exports and 39 per cent for re-exports. This was a respective fall of three and two per cent for total exports and domestic exports. There was a four per cent rise in domestic exports. Analysts generally believe this is a sign that the austerity measures on the mainland are taking effect. In value terms, $35 billion of Hong Kong's total exports to China during the first quarter were for outward processing, which is adding value to goods. This represented a four per cent rise compared to the same period last year. For domestic exports, it fell by 16 per cent to $8.2 billion while the value of re-exports to China for outward processing rose by 12.6 per cent to $26.8 billion. Over the same period, the value of imports from China that were connected with outward processing rose by 23 per cent to $72.2 billion. Sophie Huang, an economist for Lehman Brothers, said: ''The increase is small compared to the last couple of years. Despite this, China is still running at its 10 per cent growth target. The overall rate of growth has slowed because of China's austerity measures.'' Earlier this week, it was announced that re-exports rose to command more than 80 per cent of the value of all Hong Kong exports in the first half of the year. About 81 per cent of the value of exports are in goods being re-exported from Hong Kong, while re-exports make up 39 per cent of all trade by the territory. For re-exports, China continued to be the key trading partner. Out of $428 billion goods passing through the territory, 88 per cent, or $378.4 billion, involved China, in either direction.