TNAG-2126-FCO40-3036-Investment-in-Hong-Kong-1990 — Page 173

HN SWIRE & SONS LTD

Swire House

59 Buckingham Gate

London SWIE 6AJ

Registered Office

Registered Number 133143 ENGLAND

From Sir Adrian Swire

Chairman

The Editor,

"The Times",

1 Pennington Street,

LONDON, E1 9XN.

Sir,

K

Telegrams:

TEMSELOAF LONDON SW1

Telephone:

01-834 7717

Far: 01-630 0353

Telex: 888800

Answer back:

SWIRE G

25th January 1990

In the process,

Hong Kong is currently receiving very wide media coverage. several basic misunderstandings (quite apart from those concerned with the present burning issues, e.g. passports, Vietnamese, Basic Law), emerge repeatedly.

Firstly, the impression is often given that the 1984 Joint Declaration was some kind of unnecessary Foreign Office aberration, and that if only a firmer stand had been taken with China, Hong Kong could have continued happily after 1997, either under British administration or as a fully autonomous city-state with its democratic freedoms guaranteed internationally. Neither of these propositions is sustainable. The Joint Declaration was a great achievement and remains, whatever its imperfections, the bedrock for Hong Kong's future.

Secondly, there is inadequate recognition that the task facing the FCO and the Hong Kong Government (and in particular the Governor of Hong Kong) is, in present circumstances, one of quite unprecedented complexity and delicacy. Those responsible for the territory are entitled to the staunchest possible support.

Thirdly, few commentators seem to appreciate that the British commercial involvement in Hong Kong continues to be massive. Of course, there has been significant, and welcome, international investment in particular from Japan. and the U.S.A.; of course, and rightly, Hong Kong Chinese now dominate several markets and institutions. But British underlying investment in real estate, aviation, telecommunications, trading, financial services, and in some other spheres is very substantial; and a high proportion of the major companies quoted on the Hong Kong Stock Exchange are British managed and/or controlled. frequent assertion that British commercial interests have progressively withdrawn from Hong Kong is quite incorrect.

The

Moreover, there is too little awareness that Hong Kong is the hub, and often the motor, of most British business carried out in the Pacific Basin, the area of fastest economic growth in the world today. It is only because of Hong Kong's existence that the British have such an advantageous position in this whole area, a long-term commercial benefit of incalculable value to the United Kingdom.

The transition of Hong Kong through 1997 will be a difficult balancing act. The equilibrium of those responsible for performing this feat must not be upset by oft-repeated fundamental misconceptions about the territory.

ACS/pak

Yours faithfully,

Adusi swie