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(d) Trade: the balance of visible trade favours Hong
Kong (1982 UK exports £730 million, imports £870 million).
But Hong Kong is a major importer of inter alia Eritish
rolling stock and power generation equipment. And the UK has a favourable balance in invisibles, that may roughly
offset the deficit in visible trade.
Future Developments
They could
5. The talks with the Chinese overshadow other matters.
affect business confidence. Unless new arrangements are made with
China, 90% of Hong Kong reverts to China in 1997 when the New
Territories lease ends. (Without the New Territories, the remainder
of the territory would be unviable as a separate UK dependency.)
Hong Kong is also influenced by the world economic situation. The
prospects are for modest recovery in the manufacturing sector and exports
Problems
6.
(a) How to secure a lasting settlement with China which
provides adequate guarantees for the maintenance of Hong
Kong's way of life and hence prevents pressure arising
from a number of the 3 million British Dependent Territories
Citizens in Hong Kong for admission to the UK. (There are in
addition 19,000 British citizens in Hong Kong with the right
of abode in the UK plus public servants who can be expected
to apply for registration on grounds of Crown Service.)
(b)
How to maintain confidence in Hong Kong when most
bilateral issues between the UK and Hong Kong are seen
there as tests of HMG's continuing commitment.
Next Meeting/Visit
7. Ministers are closely involved in the handling of the negotiations with the Chinese. There may be a need for an early high level visit, either to Peking, if the talks showed signs of going wrong, or to
Hong Kong to boost confidence.
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