CONFIDENTIAL
From the Secretary of State
consequent lower growth rates. I pointed out that the UK's attitude would be coloured by the extent to which Korea demonstrated its adherence to liberal trading policies.
In Hong Kong textile imports into Britain were the principal interest. I said that we would honour the Multi-Fibre Arrangement but that I did not wish to enter into any premature speculation on
the successor to the MFA which need not be concluded for another
two years and indeed the bilateral agreements with Hong Kong had almost three years to run.
On the broader front our exports to Hong Kong have done much better in the past three years. Last year they rose by approximately 22 per cent and some of the very large export orders (such as deliveries of equipment for the Castle Peak Power Station) are not yet showing up in the export figures. On a less optimistic note I have always been shocked that the UK only has 5.2% of Hong Kong imports of manufacturers approximately the same as our average share in world markets generally. The much vaunted "British link" clearly does not extend to commercial decisions. Obviously it is largely the responsibility of British companies to sell to Hong Hong but on a number of occasions I stated bluntly that Hong Kong should buy more from us. It is, of course, a tremendously active economy, and I was assured on all sides that it will become even more important as the stepping off point for selling into China. For the time being the Germans and French are doing better than us in China and we must wait and see if our "link" with Hong Kong pays off. As you know there is the oft-repeated criticism that our exporters used Hong Kong as a watering-hole rather than treating it as a market in its own right and a way to sell into the Far East.
CONFIDENTIAL
3
'KEr y H"ས