TNAG-1951-FCO40-2779-British-capital-investment-in-Hong-Kong-1989 — Page 124

1989-03-16 14:53 BRITISH TRADE COMMISSION

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852 5 845 2870 P.06

sector. In the absence of more extensive local information, these manufacturing

figures have often been misread as total investment in all sectors. This has

led to considerable misunderstanding. Generally, British companies have

invested less in the manufacturing sector and more elsewhere in the economy.

At the end of 1986 British companies accounted for 7.8 percent (at book value)

of the foreign-held fixed assets in manufacturing. However total British

investment throughout the economy was a much greater proportion than this.

8. Even within the manufacturing sector, the local figures have not given a

comprehensive picture of British involvement. They have not included all the

investment made through locally-incorporated companies. As most British

companies operating in Hong Kong choose to incorporate here, this has meant

that much of their investment and that of their subsidiaries has not appeared

as British. For example, almost all the investment of the Swire Group in Hong

Kong is made through Swire Pacific or its other subsidiaries and has not shown

up as a British (or part-British) investment.

9.

It is sometimes suggested that there has been little new investment from

Britain in recent years. The details at para 6 show this is not so, In the

last year there has been significant activity including aquisitions by the

Beazer Group and by Polypeck International; P & O are looking for new

opportunities in Hong Kong. In manufacturing, Technophone will soon begin

producing mobile telephones at a local plant; and new ventures have included

one by Pilkington. Further evidence of British activity has been the opening

in the last two years of about 12 new retail stores. Reinvestment by existing

British companies has been considerable and is continuing at a high level.