BRITISH BUSINESS IN HONG KONG
A REVIEW
PART II: BRITISH COMPANIES IN HONG KONG, INVESTMENT AND INVISIBLE FARNINGS
1.
The first part of this review of British business interests in Hong Kong dealt with sales of British merchandise, projects and opportunities. It noted that British sales in Hong Kong in 1987 reached a record of £1,013m and that our share of the market was 3.1 percent. Later figures are now available. They show that British exports to Hong Kong in 1988 were £1,030m, an increase of 1.7 percent. However, our share of the market fell to 2.6 percent.
This second part of the review deals with British companies in Hong Kong, investment and invisible earnings.
2.
British Companies in Hong Kong
3.
The Trade Commission has dealings on a regular basis with more than 400 British companies established in Hong Kong. Many of these have local subsidiaries. There are also a large number of companies that are not wholly owned from Britain but in which there is significant British investment or management. In all there is British involvement through direct control, investment or management in close to a thousand companies in Hong Kong. Additionally, 2,500 British companies have agents here.
British Investment in Hong Kong
4. A considerable amount of British investment in Hong Kong is in well- established companies and groups some of which have tended over the years, to assume more of a Hong Kong identity. They remain British controlled and managed but they also project a local image. They include the present Hong Kong Telecom Company (75% owned by Cable and Wireless plc), Swire Pacific (27% owned by the John Swire Group) and Jardines (controlled by the Keswick family of Britain). There are other large groups in Hong Kong that remain clearly British they include Standard Chartered, Inchcape, British-American Tobacco and Shell. There are many smaller British companies. There are also a number of large Hong Kong groups that are not controlled by British investors but are directed or managed by a substantial number of British personnel. These include the Hongkong and Shanghai Bank and the Kadoorie Group.
5. It is difficult to establish a comprehensive figure for the total value of companies owned, controlled or influenced from Britain. However, a review of annual reports (mostly for the year 1987) supplemented by some information given in confidence, confirms that:
British companies have net assets in Hong Kong worth between £2,500m and £3,000m. This includes the total net assets of companies wholly owned from Britain and an appropriate proportion of the net assets of companies partly owned and controlled from Britain.
The total net assets of companies controlled from Britain is at least £6,000m. This includes the assets of non-British shareholders in British controlled companies.
The total gross stock market value of British owned, controlled or managed companies in Hong Kong in January 1989 was £19,000m. This includes companies managed by British personnel but not owned from Britain.
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