TNAG-0382-FCO40-428-Sterling-assets-and-balance-of-payments-of-Hong-Kong-1974 — Page 31

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actually dropped but I am happy to say that they look much better so far this year.

I do not say any of this to complain or suggest that there should be a closer balancing of trade between us. The more you can trade, the better. Your exports to us are a benefit to our economy just as they are a benefit to your prosperity. My point only is that we have to compete in Hong Kong and latterly we have not been as successful as we should. It is my main task to remedy this situation.

U K ECONOMY

All sorts of reasons have been advanced for this.

I won't list and argue them all here but merely refer to the three main ones usually advanced to us. First our prices - we have been told - have been high relative to those of some (and particularly one) aggressive competitors who for various reasons were prepared and able to keep their prices exceptionally low in Hong Kong dollar terms. Secondly our delivery and after sales service has been compared unfavourably with that of some of our principal competitors, and especially those

who are much nearer at hand than we are. Third it has

been felt that British exporters have not shown as

close an attention to the market as it deserved.

Whatever the reason I regret to say that the fact is that what was a strong market for us has been largely taken over by virtual newcomers and we can see others

still coming up fast. Our share has declined from 12%

10 years ago to 6.7% now.

What can we do about it? More to the point, what

will we do about 'it?. The answer is to fight back and we are doing so.

The first two points I mentioned-i e prices and delivery are basically functions of the state of the

home economy.

I make no pretences about it; for the past few years we have been going through a difficult time. Many things have contributed to this and not,

/by any means,

5.