CONFIDENTIAL
RECORD OF MEETING BETWEEN THE MINISTER OF STATE FOR FOREIGN AND
COMMONWEALTH AFFAIRS AND THE CHAIRMAN OF THE HONG KONG TRADE
DEVELOPMENT COUNCIL AT THE HOUSE OF LORDS ON THURSDAY 7 OCTOBER
AT 4 PM
Present
The Rt Hon the Lord Goronwy-Roberts
Mr Galsworthy
Mr Duffy
Mr T K Ann
1. Lord Goronwy-Roberts welcomed Mr T K Ann and asked for his views on the Hong Kong situation.
2. Mr Ann said that Hong Kong had, apart from its natural harbour and its hard working people, no assets but nevertheless it had become a major exporter. The resilience of the workers was shown by the quick recovery from the recent recession which had been effected. Although the rate of growth was now flattening out after the earlier months of 1976 the prospects were still good. Denims had led the recovery from the recession and indeed cotton textiles were still the backbone of the Hong Kong economy. The Trade Development Council was actively pressing for diversification and electronics were now the second biggest export from Hong Kong. Indeed, Hong Kong had for years been making parts for American computers.
3.
Lord Goronwy-Roberts asked whether there was any new investment in Hong Kong. Mr Ann said that there had been greater investment in 1975 than in 1973 and 1974 as demonstrated by the increase in purchase of capital goods. In response to a question by Lord Goronwy-Roberts, he said that the death of Chairman Mao and the American presidential elections were affecting investments. He said that Hong Kong banks paid only 2% on deposits and consequently most deposits of Hong Kong firms were in foreign banks where the rate of interest was above 5%. He thought that the important thing for Hong Kong was that people should have confidence in its future and the backing of HMG has been a main source of confidence. China too supported the existence of Hong Kong and had never put the squeeze on Hong Kong and only varied the price of its products to adjust for currency fluctuations.
4. Mr Ann stressed the importance to Hong Kong of the inclusion of cotton textiles in the GSP and hoped that the Minister would support Hong Kong on this issue. Lord Goronwy-Roberts said that HMG had done so in the past and would continue to press for the inclusion of Hong Kong's textiles in the GSP. He thought that the climate amongst
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