TNAG-0210-FCO40-246-Briefs-and-background-notes-for-visit-of-Deputy-Under-Secret-1969 — Page 72

VISIT CF DEPUTY

CONFIDENTIAL

Note No. 14

UNDER-SECRETARY OF STATE

(SIR LESLIE MONSON

ΤΟ HONG KONG, OCTOBER. 1969

CONDUCT OF HONG KONG'S

COMMERCIAL RELATIONS

Hong Kong is one of the world's major exporters of textiles; of its total exports valued at £573 million in 1968 about half are textiles (both fabrics and garments). With Japan, India, Pakistan, Taiwan, Korea and Singapore, Hong Kong is one of the low-cost producers whose exports of textiles to the developed importing countries have led to political pressures in those countries for the imposition of quantitative restrictions on low cost imports.

2. The U.K. is a major importer of textiles. More than 40% of total consumption is met by imports; no other developed country imports anything like this proportion of its consumption. It is not surprising therefore that in the field of textiles policy U.K. and Hong Kong interests should diverge to a substantial degree. This is the situation that has contributed more than anything else to a crisis in relations with Hong Kong concerning the U.K.'s long term policy on textiles and the conduct of the Colony's commercial relations.

3. We expect to have discussions with the Governor on the latter issue while he is here, with the Board of Trade taking part. But it is very likely that any visiting official to Hong Kong will (as instance the case of Mr. Hughes of the Board of Trade) encounter critical comment on the theme that the Colony should be allowed to conduct its own commercial relations without interference from H.M.G. The notes below are

CONFIDENTIAL

/explanatory