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DSR 11C
would be financed by sales of electricity to Hong Kong.
Because of the UK/Hong Kong connection, several international
companies based in Hong Kong place substantial orders in the
UK for delivery to third markets.
As an entrepot for UK/China
only £4.2 million of the
trade, Hong Kong's role is small:
UK's £213 million worth of exports to China in 1979 passed
through the Territory. Hong Kong's own large trade deficit
with China however helps indirectly to finance Chinese
imports from the UK and elsewhere.
AIR TRAFFIC RIGHTS
7.
Another form of fringe benefit is control of air traffic
rights at Kai Tak airport and their value to HMG as a
negotiating card in air service talks with third countries.
This factor is not longer so important in negotiations, owing
both to the growth of Cathay Pacific as an international
carrier and to the fact that most benefits sought for British
carriers in exchange for Hong Kong rights have already been
obtained.
INVESTMENT
8. There is no recent figure for the book value of UK direct
investment (i.e. investment that carried with it a voice in
company management) in Hong Kong: the latest available is
for 1974, when it stood at £142 million, 1.5% of total UK
direct investment. There are no figures at all for portfolio
investment (i.e. investment that does not give involvement
in management). The latest figure for the annual flow of
UK net investment (i.e. investment less dis-investment) is
for 1978, when it amounted to £47.6 million, out of a total
net investment abroad of £2,394 million. Hong Kong companies
invested £5.7 million in the UK, out of a total overseas
investment of £1,240 million.
/EXPORT CREDIT
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