TNAG-2126-FCO40-3036-Investment-in-Hong-Kong-1990 — Page 174

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Dear Donstars

2 7 MAR 1990

HONG KONG

10th January, 1990"

Mr Holroyd

9213

Mr Stone

10

How is thr exercise getting in

May I congratulate you on the excellent

constructive feature article on Hong Kong in to-day's Telegraph. This is very helpful.

W 2/3

May I however, take you up on one figure which I feel understates the British Commercial position in Hong Kong when you say that our direct investment in the Colony "exceeds £2,000 million."

With the removal of Exchange Control I recognise that it is very difficult to estimate what Britain's direct investment is. However, we do know certain statistics which perhaps may make you wish for your officials to look again at the figure - "exceeds £2,000 million"..

1.

2.

Cable and Wireless direct investment in 60% of H.K. Telecom is alone valued in the market at £3 billion.

The gross value of British Managed or controlled companies in Hong Kong is £21 billion which represents 40% of the Hong Kong stock market, a market which due to political problems is selling at a low rating and could easily double if China's attitude to the Colony improved. We would then be talking about a figure of £40 billion.

Laxed to MGB-15.1.90.

Cont/.

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