by a plebiscite only "after the elimination of the consequences of ag-
gression". Elections will be held for a new National Assembly and
President under the new constitution.
This new political programme is designed to prevent further
demonstrations by students like those in Febru- ary (FSL 1065, 66); they
had in fact planned more for this week. Nasser can argue that their
demanda for free elections and the rule of law are granted in his new
pro- gramme. But the students in fact are likely to feel that his
proposals are not only insufficient but unlikely to be seriously
implemented. However, the plebiscite on May 2 and the organisation of
elections for the Nat- lonal Assembly on July 23 will conveniently
straddle the first anniversary of the June war - potentially a dangerous
time, when new demonstrations are likely.
Nasser insisted that priority would be given to prep- arations for the
next battle with the enemy, a battle which would "efface all traces of
aggression". Yet,
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FSL 1070
"We have declared already many times and we continue to declare that we
are still ready to accept a political solution" with Israel. He never
even mentioned Israel's attacks on Jordan of March 21 and 29. King
Hussein must have fell as unsatisfied listening to the speech as the
Egyptian students. The only person who has any reason for satisfaction
is Ali Sabri, ASU Prealdent.
Grechko
Marshal Grechko, Soviet Defence Minister, arrived unexpectedly in Cairo
from Damascus on March 30. When he left Moscow on March 20 he was
scheduled to visit only Iraq and Syria. Meanwhile a new faract- Jordan
clash occurred on March 29, following those of February 16 and March 21.
The question his visit rai- aes is whether the Soviet Union will let
Egypt come to Jordan's ald in further clashes with Israel. Since the
Soviet Union has replaced 80% of the arms Egypt lost last June and has
thousands of instructors in key post- tions in her armed forces, Egypt
cannot move without Soviet permission.
There have been reports from Cairo this week that in the light of
Israel's continued Intransigence, the Soviet Union has decided that it
has no choice but to back Egypt in an attempt to regain Sinal. There
have also been reports that on March 21 President Nasser offered King
Hussein air cover, but that the King declined the offer In order to
avoid escalation; for the same reason be has not used Jordan's Hunter
jets in any recent incident. Yet on March 26 Egyptian military transport
planes landed supplies at Amman airport.
Whitehall still believes, however, that the Soviet Union does not want
Egypt to become involved, either on her own or on Jordan's side, in a
new confrontation with Israel which might bring the Soviet Union into a
clash with the U.B. which would back Israel. The Sov- let Union is
certainly holding Egypt back. She did so on March 21 when Egypt ongaged
in a 20 minute artll- lory duel across the Canal an incident that was
not reported in the Egyptian press. And Nasser completely Ignored
laraeli attacks on Jordan in his March 30 speech.
Moreover, in the Security Counell debates after the incidents of March
21 and March 20, Mr. Malik waLB moderately constructive. He argued in
favour of sanc- tions against larael, but settled for observers along
the Jordan River. On this analysis, Marshal Grechko's tour has been
designed to hold the Arabs back, not to spur them on.
But Soviet pressure on Syria and Iraq is unlikely to be as effective as
on Egypt. The role of the 12,000 Iraqi troops in Jordan is particularly
interesting. The Jordan government, which would very much like to see
them return home, has succeeded so far in keeping the bulk of them well
away from the front line. But there was considerable movement by these
troops on March 21; it may not have been due entirely to replacements.
Moreover there are small Iraqi anti-aircraft units in the hills
overlooking the Jordan and they went into act- ion on March 29. If Iraqi
troops in Jordan Join in act- lon against Israel, this will introduce a
new element Into the Middle Exst situation over which the Soviets will
not have full control.
Rumania
• New details have reached London on the way the Ceau- saacu regime is
restricting conlacts between Humani- ana and foreigners, particularly
Russians and east Fur- opeana (F8L 1066). The restrictions are listed in
a decree dated May, 1966, which has never been published, and for a long
time was not fully implemented But for several weeks now the security
anthopties have been calling meetings in ministries, foreign trade
organisa-
tions, universities, technical schools and factories to publicise the
decree.
It requires every Rumanian to: report any contact with a foreigner,
whether he is from another commun- ist country or not; report any
conversation with a for- eigner overheard in a public place; bring any
letter re- ceived from abroad to his place of work; ask permission
before offering or accepting any hospitality or invitation from a
foreigner: submit a report after a visit abroad; and declare any present
from a foreigner.
As a result of the strict enforcement of these re- strictions, Rumaniane
who were normally accessible to foreign embassies or to visiting
journalists or business- men, now ask that arrangements be made for
meetings through the Foreign Ministry. But the restrictions are being
applied more to contacts with Russians and east Europeans than to those
with westerners. Rumanian officials state apologetically to westerners
that the restrictions are not aimed mainly at them. And atta- chés of
Soviet and east European embassies grumble to their western colleagues
that their contacts with Rum- anians have declined drastically.
Three reasons are believed to lie behind the restric- tions: Firstly a
desire to make it more difficult for either Russians or eastern
Europeans to seek allien inside Rumania to overthrow Mr. Ceausescu the
'on- fant terrible' of the Warsaw Pact; secondly the secret police,
still smarting under Ceausescu's attack on them last July for
inefficiency, are showing how they have reformed; thirdly the Rumanian
leader views with alarm the liberal ferment in Czechoslovakia and is de-
termined that it will not infect Rumania.
In a speech on March 22 Ceausescuclaimed that the Party Congress in July
1965 had "resolutely embarked on the path of doing away with
conservative tendencies to stiffness and rigidity in economic, social
and poltt- ical life". He called for a "debate on the crucial la- sues
of the development of our society with the broad mass of the people".
But the party is to be "the true motive force, leading and guiding the
whole activity, mobilising the masses to implement party polley". The
masses are thus not to participate in discussions but to be merely
passive instruments implementing It. The National Assembly bolds two
sessions of two days each year and never modifies pre-determined party
policy.
Cables
AMMAN: At one of his restricted meetings with gov- ernment, political,
business and academic leaders on March 5, King Hussein said he would
like to cooperate with "Bound elements" among the guerillas but he hoped
to control the more Irresponsible elements who might force the Arab
atatea into a war with Israel for which they are not prepared. The King
has been encouraging moves to form a National Front government under
Bul- elman al Nabulsi (Premier in 1956) who le distinctly pro-Nasser. It
would include prominent Palestinians from the West Bank, leftists,
Banthists (Arab Social- lela) and Moslem Brothers, but not apparently
guerillas,
PARIS: French Embassies in Africa are reported to have been informed by
the Elysee that France would Intervene militarily to prevent a change of
government in seven out of fifteen former French African colonies:
Senegal, the Ivory Coast, Niger, Cameroon, Gabon, Congo Brazzaville and
Madagascar. Senegal and Mad- agascar have French naval bases, Niger and
Gabon uranium. In the Congo Brazzaville, France's interest is in
preventing a shift of government to the extreme left, not to the right.
Excluded from the list as of "no permanent interest" to France are
Mauritania, Mali, fiuinea, Chad, Upper Volta, the CAR, Togo, and
Dahomey.
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151
CITY AFFAIRS
Outlook
The investment environny al is changing these day S at a bewildering
speed. No sooner was Britain's bod get out of the way a key element in
international con fidence - than Stockholm esme, with the Finely trying
to shoot down the Special Drawing Rights" (SDR
The
bankers' paper gold scheme. The fact that Feness's EEC partners split
with her over this issue is signifi ent. They put the stability of the
international ʼn one- tary system over their loyalty to an EEC partner
ind served notice on de Gaulle that he eath to only so far in his
destructive war against the Anglo- Saxons, reement on SDIt's does not
solve the world " mon y problems, but it would have been disastrous, the
re had been no agreement
The Johnson bombshell really does after the econ omic outlook. If
Vietnam peace moves succeed, then the D. S. balance of payments deficit
may at last be ended. At the same time there would be a long period. of
readjustment on Wall Street from an economy half- geared to war to one
geared to settling the problems. of peace. For the U.S. this means
re-absorbing the men in Vietnam and getting to grips with the cancer of
slums and civil riots. Part of what was spent on the war will be spent
on improving the lot of the American poor. Economic growth should not
come to a full stop. But dollars will be spent internally, instead of
abroad, to the benefit of the balance of payments.
This does not suddenly make Wall Street attractive. There are still many
imponderables in the equation. European stock markets still look better.
If the Amer- icans can win more room for manoeuvre in curbing their
balance of payments deficit, the Europeans are likely to reflate more
generously. But as stockbrokers Simon and Coates point out in their
Investment letter, if the Americans enn now win back their own
self-respect and constructive world leadership, then American business-
men will be galvanised into taking their customary op- timistic view of
future growth prospects.
Gilts
This week it has been the gilt-edged market's turn to make the running.
Sterling's good performance fol- lowing the Stockholm agreement on SDRs
led to revival of hopes for another cut in Bank Rate and a good de- mand
for gilt-edged right across the board. City ex- perts are suggesting a
gentle rise is in prospect, pos- sibly developing into something
stronger, should the re be no further upsets in the international
monetary field. Over the coming weeks a good deal of money may move from
the short to the long end of the market.
Investment Trusts
time of the few sectors of the markel which is not to be subjected to
dividend limitation is investment trusts. This is logical since they are
essentially a post box. passing dividends from companies to their
shareholders However, it means that those trusts with a good earn- ings
cover will be able to raise their dividends, if they are so inclined.
Two leading investment trusts in this happy position are Cable &
Wireless and Globe Tele- graph which look very attractive at their
current prices.
There are a number of points in their favour. The past growth
performances of both companies are belter than those of many leading
trusts. This makes both stocks look undervalued on discounts of around
167,
compareil with the average discount of 10..
Both trustR
drive a wide spread of investments round the world.
I ranked income requirements are not pressing, and neither trust will
have to make large investments in prefen nee shares to make up for the
anticipated fall in their foreign memuse. Roth coinjanies have large
Tiquid resources av adabte for investiment and the shares. of each are
easily marketable. At 25s Dd for Cable and 25s 1'd for Globe, there is
little to choose between
Both are a sound investment at present levels.
Dunford
Controlled since January last year by Win. Brandt. the merchant bankers,
Dunford and Ellol supplies. steel bars and sections, rolled and treated
at ibc own works, Dunford has about 15 of the market and its biggest
customer is the motor trade.
Last December the company took over Hadfields of Sheffield which not
only gives Dunford a captive supply. of special steels but also brings
in extra technical know- how Hadfields is being extensively reorganised
and full integration should boost Dunford's prefils consid- erably.
Since Dunford Financed the acquisition through cash and loun stock, the
full benefits of any profit re- covery in Hadfields will rebound to the
benefit of Dun- ford shareholders.
Thus if Hadfields' profits were merely restored to the previous year's
level of £286,000, and Dunford maintained its own, group earnings would
be 54%, ag- ainst Dunford's present share earnings of 33%. AL 228 9d
this would put the shares on a price/earnings ratio of just over 8
times. They must be cheap.
Portfolio
• The eighth choice for our income portfolio is the Neville Group, the
Birmingham finance and issuing house. After a meteoric rise when they
first went pub- lic, the shares have lately languished. Part of the rea-
son is that the group is classed as an Industrial holding company and
they still carry a bad name in the City. Neville's profits have
fluctuated over the years but over- all they have grown sharply. It is
the financial side which has fluctuated most; the trading side has
expand- ed steadily for ten years. The capital structure is such that it
weighs against the ordinary, until profits are over the £1.1 million
mark, nearly twice the average of the last five years. Nevertheless the
yield is very attract- ive and is well covered, and at 138 the shares
look a good income stock with the chance of material growth once profits
start moving.
Bought
Income Portfolio
Giltapur Investments Hick Hargreaves Arbiter and Weston Pillar Holdings
Woolworth
S. and W. Berisford Angus Steak Houses Neville Group
AL
Now
Yield at
Cost Price
Gs 9d 6s 42d
68 1'd
9.8%
6s Bld
7.44
38 101d
38 Od
17.0%
98 9d xd
10s 9 d
6.0%
17s Od
188 21d
5.5%
9. 3d
Bs 10 d
5.67
10s Od
139 Od
98 9d
7.9%
8.5
For an index to shares covered in 1967 just telephone or send a card.
Published by the Fleet Street Letter Ltd., 72 Fleet Street, London E.C.4
Printed by Collins & Walterstow Ltd., 36 Rosoman Street, London, E.C.1
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Me. Gayorava Commonwealth
office
89
With the compliments of
FOREIGN OFFICE/COMMONWEALTH
OFFICE
PA.
AG8..
C. Wilson
I.R.D.
8 April, 1968
LONDON, S.W.1.
CG 318
M. Caylor with 9/4
For information AWG 8.4.6.
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83
Foreign Office/0.0.,
Riverwalk House, Hillbank,
London .
5 April, 1960.
I enclose a copy of the latest edition of the Fleet Street Letter
produced by Wilfred Ryder which gets a fairly wide distribution in
business and city circles and some circulation abroad. I do not know
what the precise
circulation is but since it appears to pay its way it must be reasonably
sizeable.
2. I spoke to him about the article on Hong Kon; which we discussed on
the telephone and ho explained that the material we provided by one of
his former contributors who had just returned from a visit to Hong Kong.
As you can sce it indulges in the kind of gloomy speculation which we
would not want to circulate around the city. I told him that the picture
did not square with our view of current developments in Hong Kong. He
does not get any material from your office and I suggested to him that
he should do 00. He said that he will be getting in touch with you
shortly and I strongly recommend. that he should be placed on your
mailing list. As a contact we have always found hin reasonable and
sensible to deal with.
-9. R1958
R. Boxall, Esq.,
Hong Kong Govern ent
Information Serviceo.
HWA 13/22
(C. Wilson)
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90
HONG KONG
PALL
RECEIVED IN
OFFIC
GOVERNMENZ APRICO
MALL
LONDO-
5 W
TELEPHONE: WHITEHALL 7951 CABLES HONGAID, LONDON, SWI
R.318
Bitti aprik
+968
All Camara 1 Dear Beyfing, 1914
information
of enclose for your
revited paper by
I
The Hongkong Guertens Public Relating Coordination Com the designed t
increise
overseas confidence
Carrocher will be receiving
Hongkong.
a
direce
as
a member of my
cofres
let
Liaison Committee but I can
ра
yyou
23.4
have additional coppes of
you require them. "The paper Lo. will be discussed
om 22'
at the Liaison Committee.
Aprel
yours tuncgiel
ев
fat Xey were
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17:
HONG KONG GOVERNMENT
INFORMATION SERVICES
€190
54 PALL MALL
LONDON S.W. 1
Phone: 01-930-7951
With the compliments of the
Secretary
RECEIVED IN
**-.63
22 AFRIC
HWDB/22
Overseas Public Relations Co-ordination Committee
The attached paper is forwarded as confidential background information
for those concerned with retaining and fostering overseas confidence in
Hong Kong. The reader should note that the paper does not describe all
the themes which can be used to promote Hong Kong's image, nor does it
deal with themes in detail. It is intended that others will be added or
improved upon as time progresses.
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CONFIDENTIAL
Increasing Overseas Confidence
in
Hong Kong
Elgo
INTRODUCTION
1. This is the second paper on "Overseas Confidence in Hong Kong"
produced by the Overseas Public Relations Co-ordination Committee in
Hong Kong. The membership of this committee is given at the end of this
paper.
2. This supersedes the paper produced in October 1967.
Comments
on the first paper were received from some overseas agencies
participating in the effort to improve Hong Kong's image, and these
comments have been incorporated in the revised paper. This is intended
as general guidance for all those involved in Hong Kong's public
relations work.
3. The paper does not attempt to record in detail the activities of all
agencies; information is given on any one agency's function, where it is
considered that such information might assist other agencies in an
overall co-ordination of effort.
CHANGES SINCE OCTOBER 1967
4. It is no longer appropriate to explain so fully the security
situation in the Colony. This is best left to inference from the many
other facts about Hong Kong which can be described. The predominant
theme should now be Hong Kong's increasing attractiveness for buyers,
tourists, investors and sellers. The Hong Kong Chinese overseas as a
public relations target were omitted from the Uctober 1967 paper.
5. Chinese from Hong Kong who live abroad and who still have connections
with the Colony continue to be a potential influence on not only the
people of the country in which they live but also on their relatives or
associates in the Colony. It is important that the Hong Kong Overseas
Chinese retain a balanced view of Hong Kong affairs and do not become
jaundiced by any other Chinese language information which might be
detrimental to Hong Kong's interests. is always the potential danger
that an incident could occur abroad which might provoke an unfavourable
reaction either for or in Hong Kong. A section has been included in this
paper on the Hong Kong Overseas Chinese.
PRINCIPLES UNDERLYING THE PUBLIC RELATIONS EFFORT
There
6. There is much that can be said in Hong Kong's favour when promoting
confidence overseas, so much so that it is both unnecessary and
counter-productive to attempt to gloss over any of the difficulties
facing the Colony. As a basic principle, especially when the P.R. effort
can be made
CONFIDENTIAL
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CONFIDENTIA L
2.
verbally, frank truthfulness imparted with the vigour, colour and
self-confidence so typical of the Colony is the best way of fostering an
increased awareness of, and confidence in, Hong Kong. It is the colour
which evokes the interest, the frankness which inspires the confidence,
the performance record which generates the faith and the opportunities
thus exposed lead on to the business.
7. While there is a need to convince potential retail purchasers that
Hong Kong goods have quality and give value for money it would be
prohibitively expensive and of doubtful value to embark on a wide public
relations campaign aimed at the general public with a view to instilling
confidence in and admiration for Hong Kong. It is not thought that the
social conditions in Hong Kong induce retail-sales resistance. There is
a need to reach the general public in overseas countries in the more
specialised field of tourist promotion.
8. Public Relations work is not only best done through carefully chosen
individual, personal contacts but is most effective when Hong Kong is
"sold" by someone who knows the Colony well. Such people are those who
are engaged full-time on promoting Hong Kong's interests, who have lived
in the Colony and who make frequent visits to see for themselves. A
second group
is those who are interested in the Colony's affairs who can be persuaded
to make the trip to Hong Kong and then be prepared to speak with all the
assurance of having seen for themselves: much of the Public Relations
effort should be devoted to increasing the number of people in this
group. In a third group is the Hong Kong businessman who, when abroad,
speaks confidently and knowledgeably about the Colony. The encouragement
and briefing of such a person and the care of him when he is abroad is a
vital field of operations. fourth group consists of those who are
well-briefed on Hong Kong affairs by the other groups and able to devote
time to talking to others about them.
A
The
9. The distribution of literature of a promotional nature is an
important if subsidiary public relations function which can cover a
larger number of people but with less impact. direct mailing of
information about Hong Kong is a way of sustaining the interest and
confidence attained by personal contact or visits to the Colony. One of
the most effective media for putting across Hong Kong's message is the
use of films. The Government Information Services is constantly produc
ng both short newsreel films as well as the occasional longer feature.
It is hoped that agencies will make the fullest possible use of these
films. Films are also produced by the Tourist Association for specific
purposes.
THEMES TO ENHANCE HONG KONG'S OVERSEAS IMAGE
A wealth Examples are:-
10. "The fast rate of expansion of Hong Kong's Economy"
of evidence of this comes to hand frequently.
Export figures
Gross increase in the number of factories
Overall increase in the number of industrial workers The opening-up of
new industrial ventures
(e.g. the manufacture of watch parts).
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CONFIDENTIAL
3.
11. "Continued growth of the Colony's industrial infra-structure"
Examples are:-
The expansion of the Electricity Power Companies
Plover Cove reservoir
New roads: the Lion Rock Tunnel
Resettlement housing, low-cost housing, private housing
estates.
12. "Hong Kong looks ahead" Some examples are:
Reclamation at Hung Hom and Wanchai
Opening up of new towns at Kwai Chung, Castle Peak and
Shatin
The airport extensions
Cable and Wireless Satellite Station
New reservoirs being planned
Mass Transport Survey: the resiting of the railway yards.
13. "Steady improvement in labour conditions"
Some examples are:
Larger factories already very modern and efficient Works Committees
mooted
Apprenticeship schemes
More legislation in interests of workers' employment and
safety.
14. "More tourists praise Hong Kong" Some examples are:-
Excellent facilitation of Airport and Sea Terminal Overseas tourist
agencies visit Hong Kong to see for
themselves
Well-known personalities stay in Hong Kong and lavish
praise
Hotels and restaurants earn high praise for variety and
service.
11
15. "Government helps people' For example:-
Legal Aid Scheme
Youth Employment Advisory Service
City District Office Administration.
Rapid provision of recreational facilities
Excellent modern hospitals.
UNDERLYING POLITICAL SECURITY
16. It is recognised that during personal contacts with persons
likely to visit or do business with Hong Kong there is certain to be
some curiosity about Hong Kong's political situation. It is not intended
that a description of security matters should be initiated by those
helping to improve Hong Kong's image: if the inference from other
information is enough so much the better. However, questions may be
asked. these circumstances the following themes should be stressed:
(a) The Hong Kong population continues firm
in its wish to be able to progress under the existing administration.
(b) The efficient Police Force is even better
prepared to deal with any occurrence and maintain good law and order.
CONFIDENTIAL
In
-
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CONFIDENTIAL
4.
(c) Britain will be retaining her garrison at
full strength.
(d) The tiny Communist minority is now pursuing
peaceful and lawful means of extending its influence mainly by
propaganda but having little effect on people who are more interested in
improving their living conditions. There are signs that the Communists
too wish to resume business in the most profitable way.
TARGETS
Brief notes are given below to illustrate (A) those facets of Hong Kong
which are most conducive to improved business, and (B) the factors which
underlie those facets.
17. Target: BUYERS
(A) Image
(B)
1.
Good profits
(a)
2.
Quality goods easy
to sell
3.
Value for money
(b)
4.
Quick delivery
5.
Business conducted in
English.
(c)
Factors supporting the image People work hard, quickly and
efficiently with work conditions improving constantly and steadily.
Lively, intelligent, enter-
prising and dynamic managements.
Chinese workers have very high degree of manual skills and dexterity;
and ingenious
processes used.
(a) Production highly flexible. both in volume and product design.
(e)
(f)
Sophisticated and experienced commercial infra-structure.
Sound banking facilities.
(g) Minimum and easy documentation
procedures.
(h)
(i)
Efficient cargo handling both by air and by sea.
Frequent air services in and
out of Hong Kong which is centrally located for other East Asian
destinations.
18.
Target:
TOURISTS
(3)
(A)
Image
1.
Good shopping
(a)
2.
Western comforts,
Eastern mystery
(b)
3.
Luxurious yet
inexpensive
4.
for
Visitors well cared
Factors supporting the image
Hotels rated among the best in the world
Excellent variety of cuisine and good wines
(c) Bright lights
(a) Exceptional sights, Oriental
sights
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5.
6.
7.
FIDENTIAL
5.
English widely used
No currency restric-
tions, easy convertibility Freedom of movement
19. Target: INVESTORS
(A) Image
(e)
Charming Oriental customs and manners
(f) Friendly people give
gracious service
(g) Villages and temples
reminiscent of old China (h) Frequent services by air
and sea
(i) Centrally located among
other East Asian destinations.
(E)
1. Rapid returns
(a)
2.
High growth rate from
high base
(b)
3. Stable Government
@
(c)
4.
Stable economy
(a)