UK EYES A
5.
6.
Page 3 of 5 pages
Hong Kong will continue to provide a great variety of valuable opportunities:
- an expanding market for Chinese products;
continuing entrepot and shipping facilities (although these may become
marginally less important as China's trading problems ease and domestic
cargo handling facilities improve);
further scope for providing financial services and earning greater
associated profits as Hong Kong's role as an East Asia financial
centre expands in the near future;
increased business profits as Chinese commercial, and now industrial,
activities expand;
increased remittances
factor in the foreign exchange earnings programme;
entry point for increased tourism on the Chinese mainland;
an important
In the light of the Chinese Government's current economic policies the only
economic justification for a take-over of Hong Kong would be if China's foreign
exchange carnings would, subsequent to the take-over, be greater than they are at
present. One method of attempting to maintain foreign exchange earnings would be
to operate Hong Kong as a customs-free zone where foreign manufacturers might be
encouraged to continue operations. However even the current Chinese pragmatic
economic leadership would probably find this hard to accept or justify ideologically.
Any take-over would probably therefore nationalize all industry (with the Chinese
owners probably retained, where possible, as managers as in Shanghai in 1949); integrate
Hong Kong economically with China and strictly control foreign exchange transactions.
UK EYES A
THIS IS A COPY
THE ORIGINAL HAS BEEN RETAINED IN THE DEPARTMENT UNDER
SECTION 3 (4) OF THE PUBLIC RECORDS ACT 1958