TNAG-1468-FCO40-1997-Visits-by-members-of-the-Office-of-the-Unofficial-Members-of-1986 — Page 147

JUN 09 '86 20:16 GIS HK

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F.T

Hong Kong should no longer be viewed as simply an attractive location to operate export-oriented light manufacturing industries, or service facilities, though these will continue to be a major facet of its economy. A growing significance, however, will be Hong Kong playing an important role as trader, entrepot and conveyor of capital, management and technology for China. It is increasingly evident that the international business community can benefit greatly by working with and through Hong Kong to develop their interest in that highly potential market.

The second common question that I have been asked by people abroad was: "What assurances exist that China will faithfully adhere to the terms of the Agreement?"

The first and obvious answer is that China has entered freely into a binding international agreement which has been registered } with the United Nations, and it has a reasonably good reputation

For honouring international agreements.

Furthermore, it is in China's own interest to preserve Hong Kong's current status. At present, China acquires about 30 to 40 percent of its foreign exchange in and through Hong Kong. As at end of 1985, 80 percent of all foreign investments in China are either from or through Hong Kong, and this figure does not include the recent HK-China joint venture on the nuclear power plant at Daya Bay which would cost 2 billion Pounds Sterling to build,

Apart from these economic reasons, there is one equally important political consideration. A successful implementation of the Sino-British Agreement on Hong Kong could greatly help the unification of China on the issue of Taiwan. Conversely, its failure could mean disaster in the unification process.

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However, it is not my intention to mislead any one into a state of euphoria. Despite all these satisfactory developments and encouraging prospects for the immediate future, I do agree with Sir Geoffrey's observation that there are anxieties and uncer- tainties in the minds of Hong Kong people for the longer term

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