CONFIDENTIAL
8.
Apart from this, there can be no doubt that over the next few years the Hong Kong Government will have to find considerable additional sums of money for the improvement of the social services generally. My understanding of the views of the Unofficial Members of the Executive and Legislative Councils is that this is what they want.
9.
All theseformidable commitments will be placed upon the Hong Kong Government at a time when they are facing serious competition from, in particular, Taiwan, South Korea and Singapore, in their overseas markets. We are of course doing everything we can to protect Hong Kong's interests during our negotiations for entry into the EEC; nevertheless the odds are that Hong Kong will suffer, at least for a period of some years, as a result of an enlargement of the Community. There is also Hong Kong's position in the US market to be considered. Here again, there seems little doubt that for textiles at least Hong Kong's share of the market will be curtailed in one way or another. Again, it is by no means certain that Hong Kong will not be put at some disadvantage vis å vis her competitors in the Far East as a result of the introduction of the Generalised Preferences Scheme.
10. Finally, it is surely in our interests to foster the friendly feelings the Chinese in Hong Kong at present have
towards Britain. Many large contracts running into many millions of pounds will be on offer over the next few years, some of which at least should be within the reach of British firms.
8 January 1971
CC
Mr Bottomley Mr Wilford
Mr Wade-Gery (FPAD) Mr West (EPD)
3
CONFIDENTIAL
Enaria
E O Laird
Hong Kong Department