XN000022-1986-09-11 — Page 2

THURSDAY, SEPTEMBER 11, 1986

SIR EDWARD SEES WIDE SCOPE FOR BRITISH INVESTMENT

*****

THERE IS STILL MUCH ROOM FOR EXPANSION AND DEVELOPMENT OF BRITISH INVESTMENT IN HONG KONG WHERE BRITISH FIRMS CAN AND DO SUCCEED DESPITE THE TERRITORY'S COMPETITIVE NATURE, THE GOVERNOR, SIR EDWARD YOUDE, SAID IN THE UNITED KINGDOM TODAY (THURSDAY).

SPEAKING ON +HONG KONG: OPPORTUNITIES FOR TRADE AND INVESTMENT+ AT THE ANNUAL DINNER IN LONDON OF THE HONG KONG TRADE DEVELOPMENT COUNCIL, SIR EDWARD SAID IT WAS NOT WIDELY ENOUGH RECOGNISED THAT MANY BRITISH COMPANIES WERE ACTIVE AND SUCCESSFUL IN THE TERRITORY.

HE CITED EXAMPLES RANGING FROM BANKS AND INSURANCE COMPANIES IN THE FINANCIAL SECTOR TO COMPANIES CARRYING OUT PUBLIC WORKS CONTRACTS. IN ADDITION, BRITISH EQUIPMENT WAS HEAVILY USED IN SECTORS RANGING FROM ENERGY TO COMMUNICATIONS AND TRANSPORT, WITH, FOR EXAMPLE, THERE BEING SEVERAL THOUSAND BRITISH BUSES ON THE ROADS. SIR EDWARD ALSO DESCRIBED HONG KONG AS A WELL-PLACED CENTRE FOR DEVELOPING TRADE AND INVESTMENT IN CHINA AND THE ASIAN PACIFIC REGION.

HE SAID SOME 50 BRITISH COMPANIES HAD SET UP FACTORIES WITH A TOTAL INVESTMENT OF MORE THAN POUND STERLING 70 MILLION,

+BUT BRITISH INVESTMENT IN OUR MANUFACTURING SECTOR ACCOUNTS FOR LESS THAN SEVEN PER CENT OF THE TOTAL OVERSEAS INVESTMENTS IN OUR MANUFACTURING SECTOR, FAR BEHIND THE UNITED STATES AND JAPAN, + HE SAID.

+HONG KONG IS AN ATTRACTIVE OFF-SHORE MANUFACTURING BASE FOR FOREIGN COMPANIES AND THERE IS NO REASON WHY BRITISH COMPANIES CANNOT FOLLOW THE EXAMPLES OF THE U.S. AND JAPAN IN ENHANCING THE COMPETITIVENESS OF THE IR PRODUCTS IN WORLD MARKETS, PARTICULARLY FOR THE ASIAN PACIFIC REGION.+

SIR EDWARD NOTED THAT BRITAIN RANKED AS HONG KONG'S FIFTH LARGEST TRADING PARTNER. LAST YEAR THE TERRITORY SOLD TO BRITAIN GOODS WORTH ABOUT POUND STERLING 960 MILLION AND IN RETURN BOUGHT GOODS WORTH ABOUT POUND STERLING 830 MILLION - MAKING THE TOTAL MERCHANDISE TRADE NEARLY POUND STERLING 1.8 BILLION WITHOUT TAKING INTO ACCOUNT THE VERY SUBSTANTIAL TRADE IN SERVICES.

HONG KONG STOOD AS ONE OF BRITAIN'S LARGEST MARKETS IN THE FAR EAST, SECOND ONLY TO JAPAN. DESPITE AN OVERALL BALANCE OF TRADE IN HONG KONG'S FAVOUR, THE TERRITORY ACTUALLY BOUGHT FROM BRITAIN PER HEAD OF POPULATION NINE TIMES WHAT BRITAIN BOUGHT FROM IT.

THE GOVERNOR ALSO REFERRED TO HONG KONG'S CONCERN AT THE GROWTH OF PROTECTIONIST SENTIMENT IN ITS MAJOR MARKETS, PARTICULARLY THE UNITED STATES. AS HE HAD DONE DURING HIS RECENT NORTH AMERICAN TOUR,

HE STRESSED THAT THE TERRITORY WAS A FIRM BELIEVER IN AND A REAL PRACTITIONER OF FREE TRADE PRINCIPLES.

/HE SAID: