TNAG-0461-FCO40-526-Exchange-of-newsletters-between-Foreign-and-Commonwealth-Off-1974 — Page 5

FCO40 Hong Kong Department Records 聯邦事務部香港部檔案 All

PERSONAL AND CONFIDENTIAL

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although the garments industry, in particular, had an excellent year last year and has a fair amount of fat to live off.

10. As I said in my last letter, bankruptcies have been comparatively minor so far. I would judge that the Hongs, with the exception of Hutchisons, are pretty healthy. Hutchisons, however, are quite clearly in need of cash. There was an interesting article in the Far East Economic Review of November 29, 1974 about recent share issues. I am told that they have, or at least had, a bank overdraft of HK$80 million which, at present rates of interest, eats up a lot of money. The Telephone Company too has been having cash flow problems and has had to cancel a number of orders for capital equipment or ask suppliers to delay shipment. One of its problems is that its charges are controlled by Government and it has so far failed to obtain permission to increase these. I understand both electric light companies, and China Light & Power in particular, are having cash flow problems too. The General Manager and the Deputy General Manager of China Light & Power have just resigned. I gather the resignations arise out of the considerable expense incurred in commissioning the Company's new power station, which they tried to do with their own inadequate resources in the expectation that this would be cheaper.

11. Objections by British shirt manufacturers to the present level of imports from a number of countries, including Hong Kong, have appeared in the press here for the second time in the last two or three months. The Hong Kong Government's answer, quite correctly, is that Hong Kong exports are controlled by a voluntrary quota, which has not even been filled. If this one looks like becoming an issue, however, it would be useful if you could let me know well in advance what the attitude is at home.

Your

Tim.

I. A. C. Kinnear

Senior British Trade Commissioner.

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