(DEFENCE AND EXTERNAL AFFAIRS SUB-COMMITTEE)
9 December 1975]
[Continued
17
Examination of Witnesses
Mr D F HAWLEY, CMG, MBE, Assistant Under Secretary of State, Mr K C THOM, Head of Accommodation and Services Department, Mr A C GOODISON, CMG, Head of Southern European Department, Mr P L O'KEEFFE, CVO, Head of Hong Kong and Indian Ocean Department, Mr G W HOPCROFT, Assistant, Overseas Accommodation and Services Department, Mr D F MILTON, Assistant in the Hong Kong and Indian Ocean Department, and Mr D F BURDEN, Head of Claims Department, Foreign and Commonwealth Office, called in and examined.
gentlemen.
Chairman
76. Good afternoon, Could I put this question to you to start with in relation to Hong Kong the New Territories could not be given up without the question of the future of Kowloon and Hong Kong Island being affected. It is like one city. Would that be your view?-(Mr Hawley.) Yes, that would be our view. You cannot separate the integral parts.
77. You regard Hong Kong as im- portant in the context of Sino-British relations? It is very important in that context.
78. As I understand it, it was really an inlet for foreign exchange to go into China?- -I think that would be right. but if you want to go into any detail on that perhaps I could ask Mr O'Keeffe to speak. He is the Head of the Hong Kong Department.
Mr Roper
79. As well as being a source of help- ing with the balance of payments in China it is also a considerable balance of payments advantage to the United Kingdom. Are you able to give us any estimates of what effect Hong Kong has on the United Kingdom balance of payments?(Mr O'Keeffe.) Strictly speaking the answer to that must be no, because of the way in which the invis- able account is made up. It does not distinguish between territories, and there- fore from a statistical point of view it would be impossible to give an estimate to any degree of accuracy. What one can say is that necessarily with British banks, insurance companies, shipping concerns and similar companies present in Hong Kong there is a considerable return on the balance of payments account which may run into some hun-
dreds of millions of pounds, perhaps £200 million or £300 million.*
80. It was put to us that the fact that Hong Kong is the second largest British airport there is considerable value in negotiating flying rights for British Air- ways and other British lines, as we can trade these off against landing rights else- where in the world. Could you com- ment on that? That is indeed the
case.
* * *
Mr Sandelson
81. It is important, possibly for the record, to establish since one does not wish to underplay the significance of Hong Kong and its value to this coun- try, the possibility of what you have been hazarding, although a somewhat rough and ready figure, as being the benefit to this country in invisible earn- ings from Hong Kong, and that the figure you give of some £200 million or £300 million might be at least double that amount in reality in annual invis- able earnings to this country. be somewhere in the region of £600 million, slightly less than the earnings to China, in terms of foreign currency from her interests in Hong Kong. Might that not establish a truer picture?---] do not think any estimate I have ever seen would put the figure as high as £600 million. To some degree we are in the realms of speculation, but in- formed speculation based upon what is known about the business in Hong Kong.
Mr Roper
It may
82. The £300 million would include the value you referred to earlier of the civil aviation rights or not? -I think
SO.
*Note by Witness: That is to say £300 million annual surplus of invisibles less a visible trade deficit with Hong Kong of £72 million in 1974.
No comments yet.
Private notes are available after approval.