and despondency among British companies with interests in Hong Kong, be they in the form of local ventures - either active or planned - or simply as an export market. Although the British presence in the administration may be expected
disappear in the fullness of time, the PRC has dicated that the presence of foreign ventures in Hong Kong will be welcome. If the experience of the Special Economic Zones is any guide, it seems inevitable that one objective of any new Administration will be to expand rather than curtail new investment.
One imagines that foreign interests must also be allowed to operate under ground rules that are not fundamentally different from those applying at present. To establish continuity in this regard is exactly the nitty gritty type of detail towards which British Government influence in the Peking negotiations should be directed. There is in fact considerable scope for the British Government to contribute actively and meaningfully to the Peking talks, in the interests. not only of Hong Kong but to Britain itself.
British sales up
Britain's trade with Hong Kong, after growing well over the past five years, fell off during the early part of the year. Despite the 1982 recession, Britain managed to increase the value of its sales by nearly ten per cent, and Hong Kong is now widely recognised as Britain's best market in Asia, ahead of Japan.
Last year, Britain in relative terms out- performed all its principal competitors. Imports from regional countries such as Japan and Singapore declined, while British sales expanded faster than those of European suppliers such as Germany, France and Switzerland, even faster than those of the USA, although in absolute terms the latter still sells to Hong Kong more than twice the amount that Britain does. British growth came mainly in the field of capital goods associated with major projects. Transport
equipment (other than motor vehicles), power generating equipment, and industrial machinery generally all grew strongly, as did iron and steel imports.
On the other hand, British imports from Hong Kong reversed a long established trend by falling. Exports were some 10 per cent down in real terms, with the fall-off being pretty evenly spread across all Hong Kong's major product groups. As a result, total trade between the two was static in current values. However, Britain retained its place as Hong Kong's fifth largest overseas trading partner (after the USA, China, Japan and Singapore, in that order), and the trade gap, although still in Hong Kong's favour, dropped in real terms to what must be its narrowest for over a decade.
Momentum not sustained Unfortunately, this momentum on Britain's part was not sustained into the first quarter of 1983, when British sales declined three per cent in current values. Exports from Hong Kong also continue to decline, but more steeply. Britain in fact was marginally in net surplus for the first quarter of 1983, although the figures were so close to balancing that a measure of variation in statistics gathering could easily have tipped the surplus/deficit position either way. (The figures quoted here are provided by the Hong Kong government's Census and Statistics Department. Comparison with figures produced in Britain will show variation between the two sets because of different freight cost allocations.)
Interest in Hong Kong among British businessmen currently still seems high, despite any political dampeners, to judge from the response to a top level mission organised by the Hong Kong General Chamber of Commerce in March. The group met CBI members at a joint London Chamber/CBI seminar on 7 March. Similar seminars were held at the Westminster Chamber in London, and in Birmingham,
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