TNAG-1252-FCO40-1585-Third-countries-and-the-future-of-Hong-Kong-1983 — Page 70

Pin Chan l-

Telay HS 212′′E..

Telephone €34one.

Enter

The Hear Mr. Houts

Your reference

144

*",

RJT McLaren Esq CMG Government SecretariatTM Lower Albert Road

Hong Kong

Near

Robin,

MKK040/5

Ou reference

RECEIVED IA WASIFY NO. 51 Date

12 APR 1983

INDEX

040/1

5 April 1983

(m)

SINGAPORE AND HONG KONG

1. You have from time to time requested reports from posts in this region about local reaction to speculation about Hong Kong's future. The following is a round-up of comment on the issue here which seems to us relevant.

2. Singapore is seen by many as a potential alternative to Hong Kong for investors' funds. Enquiries of local UK bankers however indicate that relatively little capital seems to have been flowing from Hong Kong in this direction. Our understanding is that the Singapore authorities would prefer not to encourage any sudden large scale inflow of capital, which might be destabilising and inflationary.

On the other hand they would

be unlikely to turn their noses up at a more modest and steady

We understand inflow of funds which could be adequately absorbed. however that capital being moved out of Hong Kong is finding its way rather to North America and Australasia than to South East Asia.

3. I was recently asked by a Singaporean Professor how he should set about organising an agent to be stationed in the UK to look after the £1 million approx which he intended to move from

(He wanted consular advice investments in Hong Kong into the UK. only which we duly provided!). His intent appeared to be to buy one or two small hotels in the London area. This is the only specific example of the effect of recent events in Hong Kong on Singaporeans which has come to my attention.

4.

I should also mention that Singapore has in no way given up its quest to match Hong Kong as a banking and financial services centre. This is a long standing ambition which Singapore has gone far towards achieving as a result of its growth over the past years in terms of activities and sophistication. It has long been recognised that loan syndication is an activity in which Hong Kong continues to lead. Singapore has been actively encouraging the upgrading of local telecommunications, legal and printing

CONFIDENTIAL

/services

1