TNAG-1482-FCO40-2036-Economic-and-commercial-value-of-Hong-Kong-to-the-UK-1986 — Page 17

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1

Inward Investment

CONFIDENTIAL

4. Following the signature of the Hong Kong agreement we discussed with the Hong Kong Government the extent to which

HMG

be should

seen

to

be

pursuing

inward

investment

opportunities in Hong Kong. We agreed that HMG should adopt ordinance": although a certain level of "self-denying

regarded as normal

a

investment promotion activity could be

and legitimate, we should not attempt to inspire anything

remained our policy. This has remained

more.

Regional Development Agencies

The majority of the

explained (by the

DTI's Invest

whom to

our policy has been in Britain Bureau) have

adhered to it.

Governor

Governor believes

policy of activities could

consider

5.

Although during his visit to Hong Kong some members of the business community told

told Mr Morrison they thought that

restraint on inward investment

safely be relaxed, now

this

both

we

promotion

and the

that this

that local

would be

most

unwise.

The

on sensitivities

will increase

as

we approach 1997.

An

call

this issue

increase in inward

into question

investment promotion activities would

our

real motives towards Hong Kong. We would be open to

accusations,

from

Hong

Kong

opinion

and

also

from the

Chinese, that, despite our commitment under the Agreement to maintain Hong Kong's stability and prosperity up to 1997, we were now prepared to undermine the Agreement by encouraging flighty capital to move from Hong Kong to the UK before the transition in 1997. This would reinforce latent suspicions among both groups; affect our relationship and co-operation with the Chinese; and damage confidence in Hong Kong.

Passports

for

6.

The question of British citizenship in return inward investment into the UK came up earlier this year in a the Home Secretary. proposal from Sir Michael Sandberg to

CONFIDENTIAL

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