(b) Trade Considerations
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The Governor may suggest, as he did in a recent letter
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to
to the FCC, that restrictions on Hong Kong textiles ex
which were judged in Hong Kong to be unreasonable and unfair
could lead to retaliation against British exports intercoĻA,
In this context the Governor may refer to the new power
As Hong Kong by the local otility ampany station to be built China Light and Power (where HMG cock
together with GEC and other interested British firms are trying to arrange for a negotiated contract), and the extension to the Mass Transit Railway. We cannot be certain how seriously such
a threat should be taken, but we are clear that it cannot
lightly be dismissed. There is little doubt that the Governor'
own influence, as well as a recognition that it was in Hong
Kong's own interest to have closer trading links with Britain,
had a significant influence on the allocation of the original
Mass Transit contracts last year. The Hong Kong Government
are also collaborating with us in promoting British exports
in various other useful ways, for example the inward mission
of Hong Kong storeowners this year; and to put it at its least
it would be a disadvantage to us to lose this collaboration.
2 It is of course true that we have a significant deficit
in visible trade with Hong Kong. Our imports last year were
worth £440m and our exports £204m,
eight
But the deficit is begin-
ning to narrow: in the first ten months of this year our
k177m do the commopamily faith of 1976) exports were worth (up 27 and imports were worth
6309mi
2
27:31
22744 (up 7.3%). About 60% of liong Kong exports to us are
7