CONFIDENTIAL

Cammel.

Attention in Hong Kong is now focussing on the

second Harbour Tunnel Crossing, another large and

important

million.

project with a potential

The Hong Kong Goven rment

UK content of £145

recently announced

that 3

British

international consortia, two of whom include

(Trafalgar House

companies

and Lilley

Construction), have been short listed for this project.

4. The balance of trade has traditionally been in Hong Kong's favour. In 1984 United Kingdom exports accounted to £897 million whilst imports from Hong Kong totalled

£1,267 million.

During 1984 Hong Kong's exports of manufactured goods the UK rose by 31% in value terms

whilst our export of manufactured goods to Hong Kong rose

by 23%. Clothing and textiles account for 35% of all of

UK imports from Hong Kong. This sector is Hong Kong's

most important and most sensitive internationally.

During the period January to July 1985 UK exports rose by

16.8% to £583 million whilst during the s ame period

imports from Hong Kong increased by 7.6% to £713

million.

5. The UK has a 5.7% share of all foreign industrial

investment in Hong Kong (together the USA and Japan account for 73%), but UK bank and service industries are well represented.

6. Prospects for British suppliers remain good although

the competitive advantage they enjoyed earlier this year has diminished with the strengthening of sterling.

CONFIDENTIAL

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