TNAG-0246-FCO40-282-Imports-of-textiles-from-Hong-Kong-to-UK-1970 — Page 29

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FINANCIAL TIMES

Cutting dated

No 4 AUG 1970

19

U.K.'s new surplus with Hong Kong is no flash in the pan

BY OUR OWN CORRESPONDENT

BRITAIN'S first-time success in converting its chronic trade m- balance with Hong Kong into a surplus earlier this year has proved to be no flash in the pan. Latest, but yet unpublished, trade figures for the first six months of this year reveal that Britain has converted an £11.6m, deficit. in the corresponding period last year into a £1.2m. surplus.

Exports to Hong Kong for the period totalled £50m., compared with just over £38m. in the first six months of 1969. Over the whole of last year British sales to the colony were worth just over £82m., compared with Hong Kong's cales to the U.K. of over £100mi.

This, together with re-exports, left Britain with a trading deficit of over £23m.

Although the British success bas now extended over a six- month period, it is still too early to be certain that it is a long- term one. It is partly accounted for by a slump in Hong Kong's sales to the U.K., which regis. tered a 70 per cent. increase in 1968, a 9 per cent. increase in 1969 and a 3 per cent. decline in the first six months of this year. The decline was most noticeable in sales of clothing which dropped from £21.7m, in the first half of 1969 to just over 219m. this year.

This trend reflects the failure of the colony's industrialists to switch fast enough into syn- thetics to match the growing world deinand--especially in Britain-for man-made garments. Further, Hong Kong is feeling the pinch of competition from Portugal. Synthetic garments manufactured there can be ex ported to Britain duty free under the EFTA tariff preference, while Hong Kong goods have to pay the high Commonwealth preference tariff of between 19 and 25 per cent.

HONG KONG, August 13.

The increase in British sales to Hong Kong was most marked in the motor vehicle category, which rose by almost a third to total over £6m. This rise was partly accounted for by pur- chases by one of the colony's bus companies, which is expand- ing its services. The colony's purchases of British electricity distributing equipment and tele- communications apparatus also recorded a significant increase.

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