Sarah Rae Home Office
Lunar House Croydon
5 March 1990
Dear Ms Rae
UK DIRECT INVESTMENT IN HONG KONG
1. Following your request for information on UK direct investment in Hong Kong, I have written a brief note describing direct investment and the latest information available for Hong Kong.
2. Direct investment refers to investment that is made to add to, deduct from or acquire a lasting interest in an enterprise operating in an economy other than that of the investor and which gives the investor an effective voice in the management of the enterprise.
3. The statistics on UK direct investment overseas show the results of inquiries carried out by the CSO. The annual inquiry into overseas transactions gives data on the flows of direct investment in the year and the earnings made on the direct investments held. This annual survey is supported by a triennial Census of overseas assets which provides information on the book value of overseas net direct investment by and in the UK. The latest published information for both inquiries is for 1987.
4. The annual information on overseas transactions is published in business monitor MA4 'Oveseas transactions'. Estimates of the book value of overseas direct investment at end-1987 were published in British Business on 29 September 1989 and will be available in more detail in business monitor MO4 'Census of overseas assets' within the next couple of months.
4. UK net external assets from direct investment in Hong Kong were valued at £1.9billion at the end of 1987, an increase of £400million on the value at the end of 1984.
5. Annual information on transactions of assets over the past few years shows an increase in the flows of direct investment capital from the UK into Hong Kong, with net flows of £178million in 1986 and £280million in 1987.
6. The net earnings from UK direct investments in Hong Kong rose to £486million in 1987, an increase of almost 40% on the previous
year.
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7 I have enclosed copies of the relevant tables from MA4 and those which will appear in MO4.