TNAG-1007-FCO40-1257-Appointment-of-the-new-Governor-to-Hong-Kong-Parliamentary-q-1981 — Page 24

CONFIDENTIAL

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asked the Fight Crime Committee to undertake a thorough study of the

statistics and causes of this increase.

CASTLE PEAK 'B' POWER STATION

13. On 30 March, during the Secretary of State's visit to Hong Kong,

it was announced that a United Kingdom group, led by GEC and Babcock

and coordinated by the Department of Industry, had won an order

for the construction of the Castle Peak 'B' Power Station from the

China Light and Power Company Limited and Esso Eastern. GEC and

Babcock are already building the smaller 'A' Station on the same site.

14. The order is worth an estimated £550 million to United Kingdom

industry and was won with some Government financial support. The

order will secure between 5,000 and 7,000 jobs over the next 7 years,

mainly in the assisted areas including Northern Ireland.

15. The order has been welcomed in the Territory as tangible

evidence of Her Majesty's Government's commitment to maintain

Hong Kong's prosperity. The prestige of the order will also create

a favourable climate for United Kingdom exports to Hong Kong and

neighbouring markets, especially China.

MULTI-FIBRE ARRANGEMENT

16.

The Multi-Fibre Arrangement (MFA) which regulates international

trade in low-cost textiles and clothing, is due for renewal at the

end of 1981. It is complemented by a series of bilateral agreements

between importers and exporters. The European Community/Hong Kong

Bilateral Agreement expires in December 1982.

17. Hong Kong is the major source of MFA textile imports into the

United Kingdom. In 1978, the European Community cut back Hong Kong's

(and South Korea's) quotas to below the previous year's level. There

is pressure within the European Community and in the United Kingdom

CONFIDENTIAL

/textiles