CONFIDENTIAL FM HONG KONG
TO IMMEDIATE FCO
TELNO 2657
OF 231005Z AUGUST 91
INFO IMMEDIATE BTC HONG KONG
CONFIDENTIAL
HKB 121/3
In Slove
Ли
TOP COPY
031001
MDHIAN 9841
FOR HKD FROM PA'S OFFICE
1
YRTELNO 1411: CONFERENCE ON INVESTMENT OPPORTUNITIES IN HONG KONG
1. UNFORTUNATELY TUR AND RELATED FAX WENT ASTRAY AND WE WERE ONLY ALERTED TO IT BY SBTC'S COMMENTS. WE AGREE WITH SBTC'S SUGGESTIONS IN HIS TELNO 242. ON THE WHOLE WE THINK IT WOULD BE BETTER FOR THE SECRETARY OF STATE TO FOCUS ON ECONOMIC RATHER THAN POLITICAL ASPECTS. ALTHOUGH WELCOMED IN HONG KONG, IN POLITICAL TERMS THE MOU IS NOT UNIVERSALLY REGARDED IN A POSITIVE LIGHT. OF COURSE IT IS IMPORTANT IN THIS CONTEXT BECAUSE OF THE HUGE OPPORTUNITIES WHICH WILL FLOW FROM THE CONSTRUCTION OF THE AIRPORT AND RELATED PROJECTS. HOWEVER WE THINK THAT THE STORY OF HONG KONG/GUANGDONG ECONOMIC CO-OPERATION AND GROWTH IS REALLY THE BEST STORY WE HAVE TO TELL.
2. OVER THE PAST DECADE TOTAL TRADE BETWEEN HONG KONG AND CHINA HAS INCREASED 14 TIMES (OR 30 PERCENT PER ANNUM ON AVERAGE) AND REACHED USD51 BILLION IN 1990. TEN YEARS AGO OUR ECONOMIC LINKS WITH GUANGDONG WERE AT A LOW LEVEL. SINCE 1986 HOWEVER IT HAS BECOME THE TOP EXPORTING PROVINCE: AND SINCE 1989 THE TOP PROVINCE IN TERMS OF GROSS DOMESTIC PRODUCT. HONG KONG HAS BEEN A KEY FACTOR IN THIS. ABOUT 80 PERCENT OF EXTERNAL INVESTMENT IN THE PROVINCE IS FROM HONG KONG. AROUND THREE MILLION PEOPLE IN GUANGDONG WORK, DIRECTLY OR INDIRECTLY, FOR HONG KONG COMPANIES. THIS IS AS LARGE AS THE TOTAL WORKING POPULATION OF HONG KONG: AND MUCH LARGER THAN THE POPULATION WORKING IN MANUFACTURING, WHICH HAS REMAINED STEADY AT AROUND 800,000 FOR SEVERAL YEARS. IN THIS SENSE GUANGDONG IS BECOMING AN INDUSTRIAL HINTERLAND, PROVIDING ROOM FOR EXPANSION AS WELL AS A SUPPLY OF LABOUR FOR HONG KONG, WHICH WOULD OTHERWISE BE LIMITED BY BOTH THESE FACTORS.
3. IF YOU WISH TO PURSUE THIS FURTHER, WE COULD PROBABLY PROVIDE CHINESE STATISTICS FOR, E.G., GROWTH RATES IN GUANGDONG (C 12 PERCENT PER ANNUM REAL GROWTH OVER THE LAST 11 YEARS). HOWEVER WE
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CONFIDENTIAL