TNAG-1847-FCO40-2622-House-of-Commons-Select-Committee-on-Foreign-Affairs-enquiry-1989 — Page 95

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Britain's three percent represents a lot of business. In the last 10 years, though our market share has fallen, Hong Kong has been steadily increasing in importance to us. In 1976 it was Britain's 28th largest market. In 1987 it was in 18th position. Hong Kong takes about 1.3 percent of our exports. Ten years ago it took 0.8 percent. It has been steadily climbing up the table of Britain's top export markets. As a matter of fact, it has also been increasing in importance as a supplier. Hong Kong sells us about one and a half times as much as it buys from us.

To return to Britain's exports to Hong Kong. As I said our sales exceeded a billion pounds for the first time in 1987. And were higher in 1988. That was very encouraging. There is no doubt British businesspeople are paying much more attention to the territory.

In the last 12 months there have been 30 trade missions and we have had British pavilions at six major Hong Kong exhibitions. Many of our visitors have been breaking new ground and offering new products; almost anything is worth a try. The extra attention is very noticeable. Besides the greater flow of visitors, new British stores are opening: the latest was Jaeger and in the last couple of years we have had Austin Reed, Mothercare and Habitat; Marks and Spencer; Gieves and Hawkes; Body Shop...Dunhill and Daks are here and many more. British Home Stores and Richards have entered into a major agency arrangement. Retailing and the supplying of retailers is a growth area. As a matter of fact, British clothing exports to Hong Kong grew by 50 percent in 1988 and were worth £27M. Yarns and fabrics were worth £40M.

Overall, the British presence is considerable and growing. Some people have suggested that British commercial interest and investment is dwindling but that is not so. The Trade Commission has dealings on a regular basis with more than 400 British companies established in Hong Kong. Many of these have local subsidiaries. There are also a large number of companies that are not wholly-owned from Britain but in which there is significant British investment or management. In all there is British involvement through direct control, investment or management in close to a thousand companies in Hong Kong. Additionally, 2500 British companies have agents here. We estimate that British companies have net assets in Hong Kong worth three billion pounds sterling. The total gross stock market value of British owned, controlled or managed companies in Hong Kong in January 1989 was nineteen billion pounds sterling. It is clear that British investment and management involvement remains the major overseas influence in Hong Kong

business.

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Figures for foreign investment in one sector of the economy

manufacturing

are often mentioned. Here, Britain does trail behind the United States, Japan and China. Even so, we have the largest number of establishments in textiles and clothing. As I say the total British presence is much larger. It includes people like consultants and insurance companies

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there are more

of both from Britain than from any other country. A good proportion of the earnings from the total British presence accrues in the so-called invisible sector. The extent of it is difficult to quantify but it is considerable and is almost certainly greater than our earnings from merchandise.

The increased interest from Britain is a very welcome sign. So also, is the fact that a distinct community spirit is developing among British businesses here. A British business community might have seemed unnecessary in the past because of the close connection between the United Kingdom and the territory, but one is taking shape now.

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