RE
EJ
VISIT TO HONG KONG BY LORD GLENARTHUR, 16-19 SEPTEMBER 1987
HONG KONG: BACKGROUND TRADE BRIEF
1 Hong Kong is the UK's seventeenth largest export market, and the second
largest in the Far East - only just behind Japan. UK exports to HK in 1986
a 1% increase over 1985 were £961m
and in Jan-June 1987 were £492m
11% increase over the same period in 1986.
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2 The UK's share of the Hong Kong market has declined gradually in recent
years. At end-1986 it was 3.4%, and in Jan-May 1987 was 3.2%. The UK is the
sixth largest supplier. Our principal exports are capital goods: power
generating equipment; electrical machinery; vehicles (buses and rail cars).
The UK has traditionally performed will in Hong Kong's project sector: the
Castle Peak power stations were built by GEC (with Babcock); Babcock built the
Town Gas plants (phase 1); and GEC and Metro-Cammell worked in unison on the
Mass Transit Railway. More recently Davy Morris won a order to supply cranes
for the container port. The UK also sells leather and fur in significant
quantities.
3
Bilateral trade is in favour of Hong Kong. UK imports from Hong Kong in
1986 were £1,531m, giving HK a surplus of £570m. Imports from HK in Jan-June
1987 were £640m a 12% increase over the same period in 1986.
4
Within the EC the UK is Hong Kong's most important trading partner, followed
by the FRG.
5 UK companies (banks, accountants, insurance brokers and solicitors) have a
large presence in Hong Kong's 'invisibles' sector. Revenue accruing to the UK
from 'invisibles' is estimated to be approximately equal to the value of the UK's
visible exports to HK.
6 The UK's share of total external manufacturing investment in Hong Kong is
7% (far less than that of Japan and the USA, which together account for 75%).
7 Hong Kong's economy is very buoyant. GDP growth in 1986 was 9%, and the
forecast for 1987 is 8-9%. In 1986 Hong Kong's total exports grew by 18% and
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