[JA3ALB]
CONFIDENTIAL
HONG KONG: BRIEF FOR SIR Y K PAO'S CALL ON THE HOME
SECRETARY
Background notes
HONG KONG ECONOMY
1.
During 1984
strongly achieving
the Hong Kong economy performed
a remarkable growth rate of 9%.
Although growth has not been sustained at this level
during the first half of 1985, this appears to be
only a temporary
for the economy
setback and the long term outlook
remains good. Domestic exports
during the first six months of 1985 have been lower
than forecast, but total exports have risen
reflecting the rapid expansion in re-export trade,
particularly with China. The property and land
markets show continued signs of improvement and,
although it has since fallen slightly, the Hang Seng
Index recently reached a four-year high having risen
nearly 1000 points in the past year. Un employment
and inflation figures remain low.
2.
four
After an intense battle lasting over
weeks, Sir Y K Pao gained control of the Wheelock
Marden Group in March this year.
He defeated
Singapore based financier Mr Kheo Teck Puat. Sir Y
K Pao's final ofer values the Wheelock Marden group
at about Hong Kong $2.5 billion 23% higher than
the original takeover offer. This has been seen as
an expression of confidence in Hong Kong
Kong and its
future.
3.
Sir YK has a specific and hel fpul interest in UK/China trade. Following a meeting he had with the Prime Minister in November last year he wrote to her
about a Chinese proposal to build a steel mill at
Ningbo on the East Coast of China. A consortium of
CONFIDENTIAL
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