TNAG-0525-FCO40-620-Visit-of-UK-Members-of-Parliament-(Defence-and-External-Affa-1975 — Page 101

Registry No.

MMF 393/1

DRAFT

SECURITY CLASSIFICATION

Top Secret.

Secret.

To:-

CONFIDENTIAL

Type 1 +

From

Telephone No. & Ext.

Confidential.

Restricted. Unclassified.

PRIVACY MARKING

In Confidence CONTRIBUTION OF HONG KONG TO THE UK ECONOMY

Department

It is very unlikely that the UK derives any significant net

economic benefit from Hong Kong's colonial status as such.

Although there can be little doubt that many commercial and

financial concerns now operating in Hong Kong and employing

British expatriates in senior positions might not have set up

there under other administrative arrangements, it is also known

that sentiment plays virtually no part in the channelling of

orders to the UK. There would also seem to be little bias in

favour of the UK on the part of Hong Kongg indigenous entrepreneurs (though, equally, there is no outright discrimination against the UK). And much the same can be said of Hong Kong's

government authorities. Thus, the contract for the first stage

of the Mass Transit Railway Project was initially awarded to a

Japanese consortium (which, in the event, found itself unable to deliver). In short, UK firms can only expect to win orders in

Hong Kong if they can demonstrate that they are competitive.

And the plain fact is that, if not in price, then in terms of

quality, speed of delivery or follow-up services, they are often

found wanting.

2.

central

Quite distinct, however, from any possible economic benefits

to be derived from Hong Kong's being British, are those arising

from China's continued willingness to acquiesce in the maintenance in Hong Kong of the present status quo. But it needs to be recog-- nised that even these benefits are very difficult to quantify, tak-

ing into account the uncertainties which any movement from the status quo might involve for UK enterprises. hhd that It is a

moot point, therefore, as to whether the net economic benefit to

the UK of the present arrangements is all that significant. In the

circumstances, the most that can satisfactorily be attempted is

a listing of the principal areas where UK-Hong Kong relations

have a bearing on the UK balance of paymen s, but recognising that

it is just not possible to put a figure on the sum total of the

direct and indirect effects (which may be positive or negative)

/and

1,500M 2/69 Hw.

NOTHING TO BE WRITTEN IN THIS MARGIN

(118281) Dd. 391599

CONFIDENTIAL