TNAG-0041-FCO40-77-Future-Sovereignty-of-Hong-Kong-Defence-Review-Working-Party-1967 — Page 124

Prepared in the Treaming

SECIENT

9

TOSSIBLE ECONOMIC OF ECT ON U.K. OF

DISTU DANONS IN HONG KONG

All fires in million

Political background

דיי

This note is written against the conclusion in the Special

Assessment in JIC(67)(SA)39. date:l 13th May 1967, which concludes

that there is a potentially dangerous situation in which we my no

longer be able to rely on the Chinese continuing to accept the

status quo for economic reasons, but that it is still possible that

the Hong Kong Government will be able to vilo out the crisis without

any major change in the ntatus juo. Political "les" are boing

made and there is a grave risk that the Chinese Government and the

local pro-communicta will sock to force the long long Government to

capitulate to the no "demands".

U.K. trade

U.K. exports were 65 in 1960.

Prospects have been gool,

and in took the level has risen from 41 in 1960. Exports cover a

wide range, including a good deal of machinery and transport equip-

ment and other notal goods. To think that com proportion goes on

to other markets through long Kong, but that not much now 3003 on

to China.

U.K. imports in 1966 were 61 0.1.f.. This included 30

clothing and 18 toxtiles. The textilan come un or the opoeial

arrangehente liniting imports from in\ividual rources.

1

The worst situation for the U.K. balance of pa zents would

be if the Chinone were able to prohibit all U.. ex ort but the

economic life of the colony continue an1, they were abl` to sell

their goods world wide an at present. To ghouli 1 65 oxporte

less two anounta - what we could sell direct in the makets hitherto

suppliel through Hong Kon and what we could cell in other worl!

>

wide markets. Clearly a lot of the exports woul1 bo difficult to

S