"Framework" for a Note on
Hong Kong's Contribution to the British Economy
(a) The UK derives no economic benefit from the fact that Hong Kong
For, although juridically a dependent territory,
is a colony.
it acts like a minor developed country.
(b) Nevertheless, colonial status has no doubt fostered the
establishment in Hong Kong of a number of commercial and
financial concerns which might not otherwise be there and which
are staffed in part by British expatriates. These latter may,
other things being equal, be prepared to put business in the way of the UK. Among Hong Kong entrepreneurs of non-British origin there may also be some bias in favour of buying British, though
this can be dulled by our failure to deliver goods up to standard
or on time. Even the Hong Kong authorities themselves are
objective in their award of contracts; thus the Mass Transit
Railway contract was initially promised to a Japanese consortium
(though the latter were in the event unable to deliver). In
short, we can only expect to benefit to the extent that we are
judged competitive.
(c) Apart from any intangible advantages of the type noted above,
Hong Kong's contributions to the British economy from transactions
in the field of trade, UK investment and finance are similar in
character to those accruing to us from many other countries.
(1) Hong Kong is only a modest market, accounting for less than
1% of our total exports. In 1974 our shipments to her
were smaller than those to any of the non-communist
"developed countries" (on the IMF/IBRD classification)
except Austria, Greece, Turkey, Malta and Iceland.
Hong Kong is a well-run economy which can usually be expected to pay its debts.
But
(ii) We have a trade deficit with her which has increased over
the years:
£ mn.
1964
1969
1974
UK Imports
81
126
292
UK Exports
58
89
158
UK Deficit
23
37
134
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