TNAG-1468-FCO40-1997-Visits-by-members-of-the-Office-of-the-Unofficial-Members-of-1986 — Page 146

JUN 09 '86 20:15 GIS HK

ยา

5

On the political front, Sir Geoffrey has just given you a very clear indication of the satisfactory progress in many major and complex areas. I can only add that the Chinese Government has also made good progress in the drafting of the Basic Law for Hong Kong Special Administrative Region and a draft outline has now been formulated with agreement of the Hong Kong members of the Drafting Committee,

On the economic horizon, the acceptance of the Agreement by the people of Hong Kong and the early signs of its satisfactory implementation have had a considerable impact on Hong Kong's economy, and a general air of confidence has returned, as ably described in the earlier speech by the Secretary of State.

Geographically, Hong Kong is strategically located at the hub of the fast develop Asian Pacific region and on the door step of the emerging China market. Despite its small size both in area and population, Hong Kong is the world's 13th lergast international trader, ranks as the world's third largest financial centre, and has the world's third largest container port. It has a very simple tax system with a maximum tax rate of 18,5%. Its communications and transport facilities are excellent, and its human resources, in terms of management expertise and labour skills, are of the highest standard,

These factors are already and sufficiently attractive for the international business community, particularly the Americans, to look to Hong Kong as a keystone in their Asian operations. with the opening of China and Hong Kong's unique role as A gateway to that vast developing market, it has introduced a new dimension and potential to our relationship,

Today, almost every province and major economic unit in China have established offices in Hong Kong to promote trade and foster economic relations between China and the outside world. Total trade between China and Hong Kong has risen phenomenally from 4 billion Pounds Sterling in 1980 to 11 billion Pounds in 1985. Last year China has overtaken the US as Hong Kong's largest trading partner.

6

P.E

A