-3-
13. If question of future comes up in margins of MP's discussions
grateful if they could comment as follows:
a) China and UK focussing on the problem;
b) all concerned keen to see prosperity and stability
maintained (independence of Hong Kong dollar important
factor);
c) wrong to expect sudden or early developments;
d) wrong to draw parallels with Falklands;
e) HMG's commitment to Hong Kong interests of its people
as strong as ever;
f) no cause for any lack of confidence in Hong Kong
UK/Hong Kong trade relations
14.
Probably Britain's biggest export market in Asia in 1981
(overtaking Japan). UK held 4.5% of Hong Kong market. Trade
balance in Hong Kong's favour, but considerable invisibles and
investment. Our exports have shown marked improvement in recent
years, thanks largely to major projects like MTR and Castle Peak.
15. Half our imports from Hong Kong are clothing and textiles.
Hong Kong aware of its heavy dependence on these items.
Sensitive areas in Hong Kong/UK relations
16.
a) Multi-Fibre Arrangement (MFA) : Strong feelings in Hong
Kong against what is seen as EC's increasingly protectionist
Negotiations for renewal of EC/Hong Kong
attitude.
bilateral agreement on textiles began on 1 June. Likely
to be tough and acrimonious;
b) Nationality Act: Hong Kong unhappy that new law did not
sufficiently express their Britishness. HMG understands
Hong Kong's feelings. No intention to distance UK from
it dependencies;
/c)