TNAG-0335-FCO40-371-Visits-of-Secretary-of-State-for-Foreign-and-Commonwealth-Af-1972 — Page 3

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BRIEF

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Trade Commiss ~ HK whore

British Trade Interests.

UK/HONG KONG TRADE

Last year the value of two-way trade between the UK and Hong Kong exceeded £269m, with the visible balance being considerably in Hong Kong's favour. Her exports to Britain, her second biggest customer, in 1971 amounted to £165m, of which textiles and clothing accounted for £103.5m. The strong growth in exports to Britain particularly of polyester/cotton garments is expected to slacken following Hong Kong's recent agreement to voluntarily restrain shipments of these items.

British exports to Hong Kong in 1971 totalled £104m- a 5 per cent increase on the previous year. Allowing for the rise in export prices resulting from inflation, this probably represents a slight fall in the volume of east-bound shipments. In the two important fields of electric and non-electrical machinery, however, Britain is doing well, with exports in 1971 up by 11 per cent and 36 per cent respectively on 1970. Even so, Britain's overall share of the Hong Kong market is declining - since 1968 it has stagnated at between 9 per cent and 8 per cent in spite of the strong increase in recent years in the demand for capital goods needed for the Colony's industrial re-equipment and expansion programmes. For these reasons, and to demonstrate Britain's wish to strengthen traditional commercial and other ties on her impending accession to the EEC, a major British Industrial Exhibition was held, at which some 160 British firms were represented, from 23-31 October.

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principal function. If this subject is raised, the Foreign Secretary could say we are well is to assist

Brilish

exporters

very aware of Britain's declining share of the market, and that the Exhibition is an important and integral part of a new promotional effort we are making to reverse this trend in the face of fierce competition mainly from Japan and the United States. We hope in particular that Britain will be successful in securing the contract for the £500m Mass Transit Railway project.

At the time of writing, 16 October, the agreement remains to be ratified.