companies, operated either directly through brokers or through HK companies acting as agents. UK in- surance companies working in HK are also permitted much more freedom over the investment of their policy earnings than UK-based companies.
It is generally agreed that HK is an important market for British shipping and associated services. 1.5 million freight tons is expected to go from HK to Europe during the cur- rent year, much of which will be carried by British vessels. HK also provides ship-repair and container terminal facilities to British shipping. Speed and efficiency in these two activities are essential and HK pro- vides the fastest shipping turnround in the world.
Hong Kong also provides the only deep sea facility for South China with container facilities. Without these, UK container vessel operations on the KAFar East route would certainly not be
as viable as they are.
Substantial orders are also placed by Hong Kong shipping companies with UK shipbuilders and if UK's price and delivery performance could be improved, considerably greater earnings would be available.
The main value of Hong Kong to UK in the field of aviation is Hong Kong's position as negotiating point in the provision of airline services — a somewhat mixed blessing for HK. UK can offer landing rights in HK in exchange for landing rights controlled by other countries. On the other hand, Hong Kong also derives ad-
vantage from international airline services using Kai Tak. But this benefit is mitigated perhaps by the loss sustained by Hong Kong in landing fees which Hong Kong might other- wise have gained, but for UK's use of Hong Kong as a bargaining point. A market & a supplier
Hong Kong is at present UK's 22nd largest export market, with UK exports to Hong Kong (including re-exports) valued at £101 million representing 1.4 per cent of UK's total exports in 1972. UK manufac- turers are increasingly looking to Europe as a main market and there is now a tendency to overlook traditional markets like Hong Kong.
It is also noted that Hong Kong is an important supplier to UK of good, inexpensive merchandise, much of which still enters under a preferential tariff, thus helping to restrain the UK cost of living.
UK also benefits by substantial construction contracts going out to UK companies. The main contract worth HK$320 million (£21 million)
for the Cross-Harbour Tunnel, for which UK provided much of the steel and other materials, as well as the £1 million consultancy contract, went to UK companies. UK also has hopes of securing at least part of the work for the £500 million mass transit system. In addition, contracts have been awarded to locally-based sub- sidiaries for building and civil en- gineering works and materials. It is not possible to estimate the value to UK of these contracts.
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