RESTRICTED
FM FCO
TO PRIORITY BTC HONG KONG
TELNO 38
OF 20180OZ MARCH 90
INFO PRIORITY HONG KONG
RESTRICTED
PERSONAL FOR HEAP FROM PAUL, HKD
HONG KONG PERSONAL FOR GOVERNOR
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RECEIVED I.
DESI
9 APR 1990
TRY
INDEX
за
104573
MDLOAN 9378
VALUE OF BRITISH INVESTMENT IN HONG KONG
1.
THIS SUBJECT IS GENERATING CONSIDERABLE INTEREST HERE. AS YOU KNOW, HENRY KESWICK BELIEVES THAT OUR CURRENT FIGURE OF POUNDS 2 BILLION FOR THE BOOK VALUE OF NET DIRECT INVESTMENT FROM THE UK IN HONG KONG GROSSLY UNDERESTIMATES THE PRESENT POSITION. HE HAS RAISED THIS MATTER WITH BOTH THE SECRETARY OF STATE AND MR RIDLEY. TWO PQS ON THIS SUBJECT HAVE ALSO BEEN TABLED RECENTLY FOR WRITTEN ANSWER BY THE CHANCELLOR OF THE EXCHEQUER.
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2. MINISTERS AGREE THAT MR KESWICK IS RIGHT TO QUESTION THE POUNDS 2 BILLION FIGURE. WE HAVE THEREFORE BEEN TAKING THE GENERAL LINE THAT QUOTE BRITISH INVESTMENT IN HONG KONG, INCLUDING EQUITY INVESTMENT, BANKING INTERESTS, AND SO ON, AMOUNT TO MANY BILLIONS OF POUNDS A MASSIVE STAKE BY ANY MEASURE UNQUOTE. BUT WE NEED TO WORK UP A MORE DETAILED FORMULATION WHICH REFLECTS WHAT WE BELIEVE TO BE A TRUE VALUE OF BRITISH INTERESTS IN HONG KONG. WE CAN TO SOME EXTENT USE THE MATERIAL PROVIDED BY HENRY KESWICK AND SIR ADRIAN SWIRE AS A BASIS, BUT SHOULD NOT OF COURSE SWALLOW THESE FIGURES UNQUESTIONINGLY.
3. AGAINST THIS BACKGROUND, WE SHOULD THEREFORE BE VERY INTERESTED IN ANY FURTHER INFORMATION YOU MAY HAVE, INCLUDING YOUR COMMENTS ON THE RECENT CPU STUDY, WHICH INDICATES THAT A GOOD DEAL MORE RESEARCH COULD BE DONE IN THIS AREA. WE ARE ALSO CONSULTING OUR ECONOMIC ADVISERS AND THE DTI.
4. WE NOTE THAT PARA 5 OF REG HOLLOWAY'S REVIEW OF BRITISH BUSINESS IN HONG KONG (JUNE 1989) QUOTED THE FIGURE OF POUNDS 19 BILLION FOR THE TOTAL GROSS STOCK MARKET VALUE OF
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