SECURITY CLASSIFICATION
3.
-DSR 11C (Revised 5/87)
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3. With all its worts our paper remains our best estimate of the
value of the items included in the survey. If there are arguments
for lower figures in the areas which I have designated illustrative
then it would be wise to err on the side of caution and use them.
The Swire and Keswick letters are interesting but much of what they
offer falls into the illustrative category of information about
British involvement in Hong Kong. The Swire letter might enable us
to lift the figures in the first two categories of paragraph 5 of
our paper to £3 billion plus and £6.5 billion but there could be
compensatory figures elsewhere.
ation
4. For a basic formulation for replies to questions you might
draw on the paragraph I suggested for the report to parliament.
5. Some further comment on the CPU paper is appropriate. On the
recommendations: Attracting foreign, including UK, investment to
Hong Kong must principally be a Hong Kong responsibility. It has the
mechanism and must see that it functions efficiently. If it truly
wants that investment and finds it of value then it cannot complain
similar about being exploited and nor can the arguments of others stand up
(Recommendation (b)). The tables can in any case be turned on the
PRC since its investments and interests here are large also and
growing. In manufacturing industry for instance it is ahead of us
and so are Japan and the USA by a long way. Hong Kong companies have
investments overseas and sell to the world (twice as much to the UK
as we sold to Hong Kong in 1989). This is a two way traffic at all
levels which no one could seriously claim exploitive without themselves
being accused. The UK is itself open to all comers for investment.
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