TNAG-0848-FCO40-1058-Future-of-Hong-Kong-New-Territories-leases-1979 — Page 175

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19 CAVENDISH AVENUE

LONDON NW8 9JD

01-286 9020

19 January 1979

Yes

I will

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ستحبا

STRICTLY PRIVATE & CONFIDENTIAL

محا

The Rt. Hon. David Owen, MP, Foreign and Commonwealth Office, Downing Street,

SW1A

2AL

Dear David,

I have just spent eight days in Hong Kong. I talked to many of note in the business world and also lower down the scale. I also talked to the Governor.

Though the figures are hard to get accurately it would seem that Britain is now a net gainer financially from Hong Kong and will become increasing- ly so. Also, valuable contracts are secured by British firms from the Hong Kong Government (for example, the equipment for the new Mass Transit Railway) mainly because they are British and not because they are the cheapest. Hong Kong grows more important daily as a base from which Britain can develop her exports not merely to China but in the whole region, covering the Philippines, Taiwan, Malasia, Singapore, Indonesia, etc, which is the great new fast growth area of the world. Additionally, if Britain wants to remain at least a Power of the second rank Hong Kong gives a tremendous political leverage with its close connection with China.