TNAG-0056-FCO40-92-Evacuation-plan-1967 — Page 71

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FINANCIAL AND ECONOMIC CONTINGENCY PLANNING

ANNEX

United Kingdom assots in Hong Kong

The book value of direct United Kingdom investments in Hong Kong

(excluding oil, insuranco and banking) at end 1964 was £26 million.

Including investment in insurance and banking and over the throo years

1963-65 takon together tho now United Kingdom investment totallod

£7.1 million.

Earnings from direct investmonts for the samo three years

totalled £15.8 million. As well as direct investment there is probably a

significant portfolio investment.

2. In so far as those investmonts aro represented by fixed physical

assets such as buildings (and/or by goodwill) there is clearly no prospect

of doing anything to salvago thom in the ovont of forced evacuation.

(At a later stago the question might arise whether in a differont political

and emotional climato thoro might bo a possibility of getting compensation

for them undor some deal involving trade or financial concessions to China).

3. Wo have not got considorod the question of salvaging movablo assots

liko ships (particularly important), commercial stocks of goods, and

such items as precious stonos and precious metals (including bullion);

further study of the problems of ovacuating porsons, if this is directed

by Ministors, could be extended to cover the evacuation of novablo assots.

Hong Kong storling holdings in the United Kingdom

4. If the Chinoso had occupied Hong Kong in the circumstancos assumed for

the purpose of this study, it must be expected that they would try to

obtain control over the disposition of assots, whother domestic or

foreign, belonging to residents of Hong Kong who are unable to oscape

(which would include banks) and to lay claim to the balances of tho

Hong Kong Government.

This lattor claim would no doubt be the subject of

logal disputation. Tho not total of privato holdings is somo £130 million,

and of official holdings over £200 million.

5. If they obtained control over tho disposition of those balancos the

Chinese would probably sook to transfer them to the account of the

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