TNAG-2126-FCO40-3036-Investment-in-Hong-Kong-1990 — Page 7

JOHN SWIRE & SONS LTD

Swire House

59 Buckingham Gate

London SWIE 6AJ

Registered Office

Registered Number 133143 ENGLAND

From Sir Adrian Swire

Chairman

Telegrams:

TEMBELOAF LONDON SWI

Telephone:

01-834 7717

Far 01-630 0353

Telex: 888800

Answer back:

SWIRE G

The Rt. Hon. Michael Heseltine, MP.,

House of Commons,

LONDON, SWLA OAA.

30th March, 1990.

Dear Michael.

Hong Kong

Thank you for your letter of March 28th and for taking an interest in this matter.

John Major's letter of March 26th does, in a negative sense, get us a bit further in that it illustrates very clearly the problem. This is that, however impeccably the official statistical figures are prepared, they are (a) out-of-date, (b) unable to present the comprehensive "real world" picture.

The whole thing is accurately summed up in John Major's final comment that "I am in no doubt that the total magnitude of U.K. involvement in Hong Kong is a great deal larger than £2 bn., even though it is not possible to be precise".

The danger, of course, is that it is the easily rememberable PQ figure of £2 bn. which then becomes carved in stone as an incontrovertible fact, which then may affect the judgment (e.g. over the passport issue) of MPs, officials and the media. Hong Kong is too important for political judgments to be distorted by bare statistical evidence of this kind.

You will know better than I what, if anything, can be done about this. Certainly, for our part, as businessmen deeply concerned with Hong Kong, we will continue to redouble our efforts to get the message across, particularly to MPs, that the British stake in Hong Kong is much more significant than is generally realised. I wonder too whether these CSO figures should not be produced annually rather than triennially - I know, for example, that our own Swire submission for 1989 will come up with a figure at least double that submitted in 1987.

Another aspect which worries me is the almost total lack of understanding in the U.K. that it is Hong Kong which is the motor for most British business carried out within the whole Pacific Basin, as well, of course, as China. (Certainly this is true of Swires.) The end benefit to the U.K. in economic terms of this fact is quite impossible to quantify, but if one believes that the Pacific Basin is the area of fastest economic growth in the world today, it is nevertheless a very important fact indeed.

Yours

Adudi