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7. Similar considerations apply in the commercial field. The increasingly sophisticated facilities offered by Hong Kong help to reconcile the Chinese Government's policy of excluding resident foreign commercial representatives from China with their need to maintain some sort of continuous relationship with essential Western suppliers and they make full use of them.
The UK
8. But Hong Kong was established for the good of the UK, not that of China. Her Majesty's Government may now accept, under the UN Charter, that the interests of the inhabitants and not those of the metropolitan Power are paramount; nevertheless it is reasonable to ask what the UK now gets out of Hong Kong.
9. It is often represented to me that Hong Kong is a positive disadvantage to the UK because the future lies in political and commercial relations with China, and these are embarrassed by the existence of the Crown Colony. Though friction with China does arise on points of detail and principle over Hong Kong, I find it helpful always to bear in mind that Hong Kong continues to exist because the Chinese Government believes its existence to be on balance beneficial to China. There is no need therefore to feel apologetic or defensive vis-à-vis China about something which benefits China, though no doubt in their inimitable way and for their own ends the Chinese sometimes make us feel just that. Nor do I think that historically speaking Hong Kong has done us any harm in China. Indeed I personally believe that as an important-if admittedly somewhat tainted- source of benefit to China, and as one of the few points of real substance in the Anglo/Chinese relationship, Hong Kong renders Her Majesty's Government more interesting and substantial in Chinese eyes than otherwise would be the case; particularly so long as we make a success and not a mess of the Colony.
10. Moreover Hong Kong provides the last tangible evidence of Britain's long association with and experience of the Far East, and the Chinese leaders appear to set some store by this, if Chou En-lai's remarks to Mr. Peter Walker last March are anything to go by. The same applies to other countries in the area. These are generally impressed by the success of Hong Kong as a commercial, industrial and financial centre, and by its administrative and social achievements, and give credit for its success to Her Majesty's Government. Moreover some of these countries have a substantial stake in the Colony, notably Japan. I think that all this amounts for the UK to that asset generally called prestige which, though un-negotiable and un-quantifiable is none the less an asset. It certainly provides added authority and sometimes a degree of leverage.
11. In more tangible terms, Hong Kong offers a substantial market to the UK. Traditionally the UK had a favourable balance in its trade with Hong Kong which between 1953 and 1962 averaged £11 million a year. Since 1963 the balance has been in Hong Kong's favour and in 1971 and 1972 Hong Kong's imports from the UK were £109 million, £99 million, and exports to the UK were £138 million and £158 million respectively. But in addition there are also substantial invisibles in the UK's favour from British activities in Hong Kong, including shipping, insurance, banking and stock market transactions. Although these trade exchanges with the UK represented only 11⁄2 per cent of UK world trade in 1972, in the same year Hong Kong rated 20th world wide among the British trading markets and sources of supply.
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