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Mr Crowson HK/IOD
"WHAT VALUE IS HONG KONG TO BRITAIN"?
1. In connection with the Governor's recent despatch on this subject, you will be interested in the controversy that has been going on in Hong Kong, beginning with an article in the 'Bulletin' the organ of the Hong Kong General Chamber of Commerce - starting with the issue of August 1973. I am not sure whether you have seen these.
2.
As regards the vexed question of 'who speaks for Britain in Hong Kong', you may not have seen a very robust defence of Britain's position put up by Mr Aston. I enclose a copy of his speech, which I think makes as good a case as is possible in the circumstances.
3. I notice that the Governor refers in his end of year despatch to the outflow of profits. He mentioned this to me during my visit and apart from attributing the information to ir Henry Keswick, could say nothing to support the assumption that remittances represented UK investors' profits. I made the point that sterling is an international trading currency that could have come from anywhere during the Stock Market boom. Once that collapsed, it was equally obvious that profits would be transferred where they could earn the most interest and therefore probably to London. I also added that I thought that local firms like Jardine Matheson must also have made a killing and they too would be redeploying their profits. The Financial Times's Survey of Hong Kong (page 18) has this to say: "Local companies such as Jardine Matheson made big placements at the high prices and invested the proceeds overseas in Jardine's case by paying £50m. for Reunion Properties".
7 March 1974
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