Annex A
CONFIDENTIAL
the last 18 months have pointed to an improvement in the situation. In 1977 Britain exported over 30% more to Hong Kong than in 1976, despite the controversy over the renegotiation of the Multi-Fibre Arrangement (MFA) which did not help the UK's image in Hong Kong. This year British companies have already won three very important contracts in Hong Kong: one to supply 70 carriages for the Mass Transit Railway, one to supply RB211 angines for the Boeing 747s being bought by Cathay Pacific Airlines and one to build a new power station for the China Light and Power Company (CLP). This latter may lead to further orders for British firms, for example, for a transmission line system estimated to be worth over £100m. (as you are aware, the Chairman of CLP discussed this possibility with the Prime Minister on 18 April: there is an as yet unresolved difficulty over guaranteeing the finance for the project).
Attached is a separate table showing British exports to and imports from Hong Kong over recent years. As this table clearly shows, there is a substantial imbalance in Hong Kong's favour. This causes a certain amount of resentment in Britain (for example at the time of the MFA negotiations, when there was a tendency for representatives in other Whitehall departments to be reluctant to accept any responsibility to support Hong Kong's case "because, after all, they don't buy our goods"). This is somewhat illogical since it is British exporters not Hong Kong who are to blame for our relatively poor performance (there are no barriers against British trade to Hong Kong). But the Governor, for one, certainly acknowledges that the imbalance is not entirely a good thing for Hong Kong, and he has personally committed himself to the drive to promote British exports.
This situation should not be allowed to conceal the fact that Hong Kong is already a very important market for British goods. In South and East Asia it ranked third after Japan and India in the value of British goods imported in 1977 (and on a per capita basis it was way ahead of either). British exports to Hong Kong in 1977 were worth four times as much as those to China.
3.30 p.m.
Political Adviser: Dr David C Wilson
The Political Adviser's prime concern is to advise the Governor on Hong Kong's external relations, which means of course particularly relations between Hong Kong and China. All reports that we have received indicate that these, like UK/China relations, remain excellent.
More recently the Governor has also been looking to the Political Adviser to provide him with advice on sensitive internal matters, primarily the Police but also including such questions as social development. It would seem that in this the Governor has accepted the need, mentioned at his last meeting with Lord Goronwy-Roberts
8
CONFIDENTI AL
No comments yet.
Private notes are available after approval.