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Not that there is any cause for complacency still many improvements to be made. But the Hong Kong Government, with our support and encouragement, are pressing forward with a programme of reforms that has brought steady improvements in conditions of work over recent years and which will, I am convinced, continue to bring such improvements in the future.

I hope you will agree therefore that it is, at the very least, a misleading over-simplification to refer to Hong Kong workers as being exploited. Such remarks can cause great resentment in Hong Kong (which, incidentally, despite its small size, is exceeded only by India and Japan as a market for British exports in South and East Asia). Fortunately your comment has not yet been picked up by the Hong Kong press, though I have received a sharp protest about it from the Acting Governor. It would be very helpful if you were able to make a statement which I could pass on to the Hong Kong Government, and if necessary make available to the press there, explaining that your comment was an over-simplification. You could perhaps say that your concern was with the fact that low labour costs in Hong Kong make it possible for Hong Kong cutlery to be sold in the UK at prices with which British manufacturers find it very difficult to compete, but that you now understand that the low labour costs are not the result of exploitation of Hong Kong's workers. would be particularly useful if the statement could then go on to express Her Majesty's Government's appreciation of the Hong Kong Government's efforts to improve social and labour conditions in the territory, and confirm our support for the continuing programme of reforms aimed at improving the quality of life for all who live there.

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R Cryer Esq MP

Parliamentary Under Secretary Department of Industry

1 Victoria Street

London SW1

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