COUPI DEPTIAL
13
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SIR MICHAEL PALLISER'S VISIT TO HONG KONG: 7-9 OCTOBER 1975
BRIEF NO. 7
UK/HONG KONG TRADE
1.
The United Kingdom's balance of trade with Hong Kong is substantially, and increasingly, in Hong Kong's favour.
2.
Commonwealth tariff preferences operated by Hong Kong, which may soon be eliminated under pressure from the United States, are confined to motor vehicles, tobacco and alcohol. The two Hong Kong bus companies are also required to buy Commonwealth vehicles. These exceptions apart, there is no special disposition to buy British goods. Hard-headed Chinese businessmen place their orders strictly on the basis of suppliers' performance.
3. From 1964 to 1974 the United Kingdom's share of the expanding Hong Kong market fell from 9% to 5%. Britain is now fourth among Hong Kong's suppliers, behind Japan, China and the United States. Our principal exports are machinery, transport equipment and a range of consumer goods. Goods which Britain cannot supply raw materials and food supplies make up a substantial proportion of Hong Kong's imports, but the United Kingdom's performance in supplying manufactured goods is disappointing compared with that of her principal competitors.
1.
The United Kingdom, which is Hong Kong's second largest market after the United States, took 14.5% of Hong Kong's exports in 1974. Textiles accounted for 58%. Most of Hong Kong's cotton textile exports to the United Kingdom have been subject to restrictions for the last 15 years and more recently restrictions have applied to woven polyester-cotton. Nevertheless, Hong Kong's Large quotas have permitted her to supply nearly half the United Kingdom's restricted cotton imports and some 30% of polyester-cotton consumption. A wider range of Hong Kong textiles, including knitwear, has now been brought under restraint by the recent EEC/Hong Kong bextilus agreement (see Brief no. 5).
TAT
15.