TNAG-1482-FCO40-2036-Economic-and-commercial-value-of-Hong-Kong-to-the-UK-1986 — Page 19

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Points to make

Inward Investment

CONFIDENTIAL

1.

inward

Understand you had a useful visit to Hong Kong and discussed UK inward investment opportunities with Governor. Thought it would

would be useful to explain to you our concerns and our present policy.

2.

Since signing of Joint Declaration UK Development Agencies and British Trade Commission have adopted low profile approach to pursuing inward investment opportunities from Hong Kong. Believe this is only prudent course. Has brought in useful investment, and will continue to do so, but without adverse political effects.

3.

Moderate level of inward investment promotion

normal in Hong Kong.

considered

acceptable and would be

Important that Chinese should be given no grounds for

suspicion that we are exploiting Hong Kong to our own

benefit.

4.

to

Committed by Joint Declaration

handing over

prosperous and stable Hong Kong. Would invite criticism and accusations of bad faith by China if we adopted high profile approach to promotion of inward investment.

5.

Very important also we do nothing to upset business confidence, a fragile plant in Hong Kong. Aggressive promotional campaign by the UK could severely dent investor confidence in Hong Kong's future. More generally, it will depress confidence in our commitment to Hong Kong and compound suspicions that we were primarily interested in furthering our own economic interests.

6. Understand business community may have suggested that sensitivity of subject now somewhat reduced. In our view, they are not best placed

to

judge objectively.

Fully

CONFIDENTIAL