TNAG-0004-FCO40-40-Departmental-briefs-about-Hong-Kong-1968 — Page 169

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G.

TRADE

The subject most likely to be raised is the prospect

of Britain's entry into the Common Market and the resulting

effects on Hong Kong's trade.

In the context of Hong Kong's trade generally the Secretary of State might say that, in the short time that he has had to acquaint himself with Hong Kong's affairs, he has been impressed by the following:-

(a) the great

growth in its trade and manufacturing

industry. Alse the remarkable resilience shown by Hong Kong manufacturers and exporters in overcoming past difficulties (e.g. the less of its former entrepet trade with China in the early 1950's and, in recent years, internal troubles such as the banking crisis in 1965, and the increased import

restrictions or voluntary restraint agreement

which the Hong Kong textile industry has been called upon to face). Despite these difficulties Hong Kong's total trade in 1966 has exceeded £1,000 millien for

the first time;

(b) Hong Kong's interest, like Britain's lies in the

expansion of oppertunities for overseas trade. This

is vital to beth countries. The particular importance

of the U.K. market to Hong Kong is well understood by H.M.Government. About 17% of the colonies' tetal domestic experts are te Britain and 95% of these enjcy

of the Commonwealth preferences; a rough estimate vàlua of those preferences in 1965 was £10.m.7 (c) The quantitative restrictions imposed on exports of

textiles, c.g. under the Long Term Cotton Textiles

Our own Agreement, are a problem for Hong Kong. action in this field however has been taken to meet the very reasrnable need to maintain a domestic industry and to permit it te re-organise itself on fully competitive lines. The import quota which Hong Kong receives is a very generous portion of the total consumption of textiles in Britain. (a) Hong Kong's policy of diversification both in its

products and in its markets is very desirable.