TNAG-2126-FCO40-3036-Investment-in-Hong-Kong-1990 — Page 159

- Fikc 12112

RECEIVED IN

25 APR 1990

STRY

25

Hong Kong Department TRY

FROM:

A R Paul

DES

DATE:

INDE

27 Peb ary 1990.

don Taken

Mr Holroyd

Mr Stone 28/2

BRITISH INTERESTS IN HONG KONG

1.

CC:

Mr McLaren

Mr Henry Keswick telephoned me today about a copy of a letter he has sent to the Senior British Trade Commissioner in Hong Kong.

2. The main purpose of his call was to revert to the subject of the value of British commercial interests in Hong Kong. He repeated his belief that our current figure of £2 billion grossly underestimates the real position. He was particularly incensed to see this figure in a Written Answer by Mr Major on 20 February, in response to a PQ by Mr Heseltine.

3. Mr Keswick had a similar conversation today with Mr Peirce, during which he made identical points.

4. I think Mr Keswick is right to question the £2 billion figure - indeed the Secretary of State's recent letter to him acknowledges that fact. I have therefore amended the standard MP's letter reply along the following lines:

"British investment in Hong Kong, including equity investment, banking interests, and so on, amount to many billions of Pounds a massive stake by any measure.

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5. I believe, and Mr Peirce agrees, that we should now aim to work up a rather more detailed formulation which reflects what we believe to be a true value of British interests in Hong Kong. We can use the material provided by Mr Keswick and Sir Adrian Swire as a basis, but should not of course swallow these figures unquestioningly. DTI and Mr Heap will need to be consulted.

6.

I should be grateful if you could set work in hand on this.

I should like to submit the outcome to Ministers by the end of this week, or early next, if possible.

PUPABJ

ARPanc

A R Paul