CONFIDENTIAL
FM BTC HONG KONG
TO DESKBY 03150OZ FCO
TELNO 103
OF 03110OZ APRIL 90
INFO IMMEDIATE DTI
CONFIDENTIAL
la
RECEIVED IN REGISTRY
- 9 APR 1990
(38)
153646
MDHIAN 7228
HOLROYD'S FAX OF 30 MARCH: BRIEFING FOR MR MAUDE'S VISIT: HONG KONG'S COMMERCIAL AND ECONOMIC CLIMATE WITH PARTICULAR REFERENCE TO PROSPECTS FOR BRITISH BUSINESS
1. HONG KONG CONTINUES TO THRIVE AS A MAJOR MANUFACTURER AND TRADING CENTRE, AND INCREASINGLY, AS A FINANCIAL AND SERVICES CENTRE. IT PROVIDES A SIGNIFICANT OUTLET FOR BRITISH EXPORTS, AND A PROFITABLE CENTRE FOR BRITISH COMPANIES OFFERING SERVICES SUCH AS BANKS, LAW FIRMS, CONSULTANTS AND ACCOUNTANTS. THE ECONOMY OF HONG KONG HAS SLOWED AND IT WILL BE DIFFICULT TO SUSTAIN ITS PAST RATE OF GROWTH, BUT IT IS STILL A FORMIDABLE PLAYER IN THE BIG LEAGUES.
2. UK EXPORTS AND INVESTMENTS
BRITAIN STAKE IS LARGE. WE EXPORTED GOODS TO THE VALUE OF POUNDS STERLING 1.1 BILLION IN 1989, AND THE FIRST FIGURES FOR 1990 SHOW A 12 PER CENT INCREASE. HONG KONG IS BRITAIN'S 17TH BIGGEST MARKET WORLDWIDE. IT IS OUR LARGEST EXPORT MARKET IN ASIA AFTER JAPAN. OUR INVISIBLE EXPORTS ARE PROBABLY WORTH ABOUT ANOTHER POUND STERLING
1.2 BILLION.
3. BRITAIN'S INVESTMENT IN HONG KONG PRODUCES A VALUABLE RETURN. BRITISH COMPANIES HAVE NET ASSETS IN HONG KONG WORTH ABOUT POUNDS STERLING 3 BILLION. THE TOTAL NET ASSETS OF COMPANIES CONTROLLED FROM BRITAIN IS ABOUT POUNDS STERLING 6 BILLION. THE TOTAL GROSS STOCK MARKET VALUE OF BRITISH OWNED OR CONTROLLED COMPANIES IN HONG
KONG IS AROUND POUNDS STERLING 20 BILLION. NONE OF THESE FIGURES ARE EASY TO ARRIVE AT. THEY ARE MORE LIKELY TO BE TOO LOW THAN TOO
HIGH. IN ANY EVENT THEY AMPLY ILLUSTRATE THAT BRITAIN'S INVISIBLE
EARNINGS FROM HONG KONG ARE VERY CONSIDERABLE.
4. DESPITE THE HEALTHY OVERALL EXPORT PICTURE, IT IS DISCONCERTING THAT BRITAIN ONLY SUPPLIES 2.3 PER CENT OF HONG KONG'S IMPORTS. EIGHT COUNTRIES SELL MORE TO HONG KONG THAN WE DO, WITH JAPAN AND THE UNITED STATES FAR AHEAD. WITHIN THE EUROPEAN COMMUNITY WEST GERMANY SELLS MORE IN HONG KONG THAN DOES THE UK (MERCEDES INCREASED ITS SALES OF CARS LAST YEAR BY MORE THAN THE TOTAL SALES
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