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(iii) We benefit from imports of cheap textiles and clothing which
account for the lion's share of Hong Kong's shipments to
the UK though our own textile industry would view these
in a different light.
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(iv) We receive income from our investments in the Colony.
Nevertheless, of the overseas companies established and
registered in Hong Kong at end-1974, 115 were from Britain
as against 226 from the US and 98 from Japan. The figures
evidently exclude locally-incorporated subsidiaries which
may be preferred to branches for tax reasons. Nor, of
course, do they tell us anything of the relative value of
investments in Hong Kong.
Such
(v) Hong Kong holds a proportion of its official reserves (put
at about 40% in a recent Reuter report annexed attributed to "informed sources" in Hong Kong) in sterling.
holdings, like sterling held by other countries, represent
lending to the UK. The Hong Kong authorities are, however,
under no obligation to hold reserves in sterling.
(vi)
The Hong Kong community no doubt avails itself of other
services of the various London financial and commercial
markets and the commission etc. arising from such business
accrues to the UK. (In the euro currency markets the UK's
gross claims on, and liabilities to, Hong Kong were at
30th June 1975 roughly equal, at the equivalent of £1.3 bn.
each.)
British
(vii) In one major service industry, shipping, the Colony is a
potential, if not an actual, competitor of the UK.
shipyards may benefit from certain orders by Hong Kong shipowners, but so do other countries' (e.g. Mr. Y.K.Pao's
recent purchases of two large vessels in Japan).
November 1975