TNAG-1039-FCO40-1289-Future-of-Hong-Kong-1981 — Page 214

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trade gap in 1979 and 1980, that the UK will have sustained a

larger current account deficit for these years.

PROSPECTS

4. Hong Kong is nevertheless one of our faster growing

markets for manufactured goods outside of OPEC, and the

prospects for UK exports are very good. Severl major pro-

jects are planned in the transport and power generation

fields that could lead to substantial exports for UK compan-

ies, i.e. Castle Peak 'B' Power Station, the Mass Transit

Railway Island Line, the new airport, the Tuen Mun Light

Railway, the Lantao/Mainland Fixed Crossing.

5.

As long as Hong Kong remained a free-market economy,

whether or not it continued under British administration, a

good portion of this trade, visible and invisible, would

still take place. It is nonetheless true that the UK derives

some benefit from its special position in Hong Kong, in

respect of work for Government tender and through goodwill

towards Britain in the business community,

Sir Lawrence

Kadoorie and Castle Peak 'B'

v,(e.g.

6. This special position can however operate against the UK

when it is seen as raising trade barriers against the exports

of its dependent territory. The Multi-Fibre Arrangement

comes up for re-negotiation this year and is likely to result

in more severe quota restrictions for Hong Kong textiles.

Imports of electrical and telecommunications goods from Hong

Kong are growing (14% of imports from Hong Kong in 1979) and

are giving rise to calls for voluntary restraint on the part

of Hong Kong exporters.

ENTREPOT TRADE

7. Hong Kong's role as an entrepot for UK-Chinese trade is

In 1979,

not very significant in statistical terms.

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/£4.2 million

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