TNAG-0369-FCO40-415-Visit-of-Edward-Heath--UK-Prime-Minister--to-Hong-Kong--12-1-1974 — Page 6

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Britain still is Hong Kong's second largest customer, taking some 14% of your exports and accounting for 9% of your total world trade. (It is interesting to note that liest Germany is the third largest customer). There seems every

likelihood that this will continue. If others should overtake us as customers

it will not be through any lack of interest, any turning away, on our part.

us

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Similarly with our exports to Hong Kong. It is still an important market to

at present our

(?) 24th largest customer and our (?) 19th largest supplier. These are roughly the positions Hong Kong has occupied for many years past. What has changed is our share of Hong Kong's market.

A few years ago it was over 10%, now it is only about 6.5%. This is not because of any absolute decline in our exports to Hong Kong they have in fact nearly doubled over the past 7 years (although even this is not as fast as the growth in Hong Kong's exports to Britain, or the trade gap between us). But many other suppliers have come into themarket. Some who are now major suppliers were hardly visible a few years ago and others such as Japan and USA and China have increased their sales considerably. Huch of this has been at the expense

of the British source.

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There are several reasons for this, quite apart from the fact that as a major supplier in some of the items most open to competition - for example machinery or motor cars we were almost bound to lose some ground. We have suffered from an accumulative reputation for unreliable delivery partly because of industrial disputes. We can with justice claim that we have been given a worse reputation on this than we deserve and that some of our competitors have been shown more tolerance. But certainly there have been grounds for criticism and we cannot, and do not, discount it. British exporters have perhaps also tended to take Hong Kong too much for granted and have not shown it the per- sistent close attention it deserves as one of our largest markets in South East

Asia and the Far East.

But whatever the reasons in the past there should be no doubt about Britain's

intentions now.

Increasing /..

Every effort is made to ensure that the information given herein is accurate, but no legal responsibility is accepted for any errors or omissions in that information and no responsibility is accepted in regard to the standing of any firms, companies or individuals mentioned.