UK EYES A
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THE ORIGINAL HAS BEEN RETAINED IN THE DEPARTMENT UNDER SECTION 3 (4) OF THE PUBLIC RECORDS ACT 1958
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share the Hong Kong market and commercial sources estimate this could rise as high
as 30%. Exports would also be boosted if China began to supply coal to the planned
new power station: a 3-way deal involving Chinese coal being sold to Hong Kong and
China buying British coal mining equipment has been agreed in principle.
benefits of major investment in port modernisation accrue and it becomes less and
less necessary politically to conduct trade circuitously, for example with Indonesia.
and USA, the importance in relation to total Chinese trade of Hong Kong as an
entrepot may decline. However an example of how Hong Kong's role as an entrepot
might be elaborated is represented by the Tsing Yi'project for machine tool and
other machinery manufacture using mainland produced products. The exports of this
factory will be recorded not as Chinese reexports but as Hong Kong exports,
although Hong Kong would still be performing a sort of entrepot function.
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22. The invisibles "sector can be expected to increase. Hong Kong is likely to
expand as an east Asian financial centre and the CRC and the banks each have a 5 year
plan to expand and boost profits to be followed no doubt by another 5 year plan
along the same lines for 1981-1985. The use of Hong Kong as an entry point for
China for tourism is likely to increase as China seeks to expand its tourist
industry. The flow of remittances is likely to increase following the relaxed
official attitude towards the overseas Chinese and the granting of special purchasing
privileges for Ghinese in receipt of remittances which were introduced in 1976 and are
presumably gathering momentum as domestic Chinese put pressure on friends and
relatives to provide increased remittances. Secret intelligence has indicated that
part of the rationale for the policy on overseas Chinese (variously estimated at
20-30 million) is to boost the flow of remittances.
23. It is declared Chinese policy that an expansion of Chinese exports is required
to pay for future imports of advanced technology. The Chinese evidently see
increased exports of oil being a major factor but it is unlikely that oil exports
can exceed 25m. tons by 1985 earning $2,50 million. The size of their import
requirements on the other hand is indicated by the figure of $10 billions of plant
14 UK EYES A