TNAG-0568-FCO40-701-Planning-paper-on-Hong-Kong-1976 — Page 108

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NOTHING TO BE WRITTEN IN THIS MARGIN

for UK or

Shapchoors

SECRET

the Councils but in practice there have not been exercised for many years. There is also bound to be friction with a Colony with substantial interests of its own not necessarily compatible with those of HMG.

Recent and current examples of such friction are the Defence Costs negotiations, the problems over textiles and the question of citizenship. The Colony's very existence, moreover, carries with it risks of clashes with China and local unrest as in

1967/ But

But there are also positive advantages from

the connection with Hong Kong where there are

important British investments; and which acts as a centre for British investment elsewhere in the Far

East and a centre for international communications. Hong Kong is a useful export market and a source of invisible earnings which together probably (but not certainly since there is no established methodology of reckoning invisible earnings) outweigh the competition Hong Kong poses to British industry in home and overseas markets. Some of the economic advantages are of course shared with other industrial democracies, notably Japan and the United States. But the United Kingdom gains special advantages from the connection with Hong Kong:which is an important bargaining counter in air service negotiations

ika

This is out of peace in

a cest

Cist of advantages

8507 D.073939 200M. 11/74 Cr.P.C. Gp.839/3

progressivelly

With the continuance of the decolonisation process for our other dependent territories it can be expected that Hong Kong will begin to look progressively more anomalous and Parliamentary difficulties may well increase. Per contra, the further development of Hong Kong can be expected to produce increasing divergence between its economic interests and our own; and on present trends some of our commercial rivals, for geographical and other reasons, may well out-compete us in the Hong Kong market.

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THIS IS A COPY

THE ORIGINAL HAS BEEN RETAINED IN THE DEPARTMENT | UNDER SECTION 3(4) OF THE

PUBLIC RECORDS ACT 1959

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