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since to do so would risk disturbing the basic structure of Chinese society and their concept of Government.
16. This is something which I believe our competitors, oriental and occidental, exploit much more than we do in
commerce.
TRADE
1.
17. Since this is the office's prime function I should say something about it, although, as you know, it is the subject of a regular quarterly report, which I hope you see, and was summed up also in the draft speech we prepared for the Prime Minister's non-visit. In one sense we have had a good year our exports to Hong Kong up to October were up by 31% and at £105 million were already, in ten months, higher than for any previous whole year (for some not entirely clear reason, which applies to all trading partners, the increases are not so great if you use Hong Kong import figures - but they are still good). The increase is more or less across the board and it is more than can be accounted for merely by price increases; it is an increase in volume, and even range. But it is not much above the rate of increase of Hong Kong's total imports, and there are several previously relatively small suppliers (eg Singapore, Taiwan, Korea, Netherlands) making rapid strides up the league, and China is looming larger (in terms of value even more than of volume because of the increase in Chinese prices) while USA has done at least as well as us, and although Japan has lost some ground it is not enough to topple them from first place among the suppliers. So we still have only about 6.7% of the market and our position as No 4 is threatened by Taiwan.
18.
On the reverse side of the sheet, Hong Kong has increased her exports to us by about 38% and has a favourable balance of £104 million (i e almost 100%) in visible trade with us.
19. We hope to improve all these figures in our favour in 1974; all the extra push which was given by the visits last year of Mr Peter Walker, Sir Geoffrey Howe, Lord Thorneycroft and others, 20 Trade Missions in 1973, another 20 in 1974, a 100% increase in the number of individual visitors - all this should produce something, unless industrial disputes (as distinct from the economic problems now common to all the major exporters) hog tie us again; if so it will be a long time before
we recover.
HONG KONG ECONOMY
20.
This is a much subdued place compared with this time last
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5.
/year.
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