SECRET
6.
(iii)
(iv)
(v)
(vi)
(vii)
give a boost to UK trade and place the UK in a much more favourable position than would be the case if the territory ceased to be under British administration. ECGD loans, the scope and size of which can also be attributed in large part to the present relationship and administrative system, also contribute greatly to British exports.
Para 6. The present relationship could better be described as an "embarrassment" over matters such as textile restrictions rather than as "operating against" the UK.
There should be a reference to the clear and undoubted benefit derived by the UK from control over traffic rights at Kai Tak. Although these may be difficult to quantify, on a global scale they are considerable.
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It would be worth mentioning that Hong Kong's large trade deficit with China (about US$3 billion in 1980 on trade alone invisibles would increase the figure) helps to finance Chinese imports from the UK and elsewhere. A prosperous Hong Kong buying goods from China therefore helps indirectly UK exports to the latter.
The Guangdong nuclear project is worth a mention. The prospects for the UK getting a share in this project are largely due to the fact that it would be financed by sales to British- administered Hong Kong.
Because of the British connection several international companies based in Hong Kong place substantial orders in UK for delivery to third markets. Such purchases do not show up in statistics of UK/Hong Kong trade. Examples on ships: Jardines purchases for eg Saudi Arabian subsidiary (orders for about 100,000 tons placed in 1980). Do US aircraft with UK engines show up in trade statistics (eg Cathay Pacific).
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/contd.
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