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173570 MDHIAN 7991
TO CATHAY PACIFIC), BUT THERE ARE SIGNIFICANT SALES IN MOST AREAS INCLUDING THOSE IN THE COALS-TO-NEWCASTLE CATEGORY SUCH AS TEXTILES AND ELECTRONIC GOODS. PROSPECTS FOR MOST CONTINUE TO BE GOOD ALTHOUGH SOME WILL EXPERIENCE A SLOWDOWN IN PREVIOUS RATES OF GROWTH. MEANWHILE BRITAIN LAST YEAR IMPORTED SOME POUNDS STR 2 BILLION WORTH OF HONG KONG GOODS, GIVING A HEFTY BALANCE OF TRADE IN HONG KONG'S FAVOUR, ALTHOUGH THE FIGURES ARE CLOSER TO PARITY IF INVISIBLES ARE INCLUDED.
3.
BRITAIN'S INVESTMENTS IN HONG KONG ARE IMPORTANT. THERE ARE OVER 400 BRITISH COMPANIES ESTABLISHED IN HONG KONG. A FURTHER 1000 HAVE SIGNIFICANT BRITISH INVESTMENT OR MANAGEMENT AND APPROXIMATELY 2,500 ARE TRADING WITH HONG KONG. TO PUT A VALUE ON UK INVESTMENTS IS VERY DIFFICULT, BUT NET ASSETS OF BRITISH COMPANIES REGISTERED AND BASED IN HONG KONG ARE THOUGHT TO BE WORTH BETWEEN POUNDS 2.5 AND POUNDS 3 BILLION: TOTAL NET ASSETS OF COMPANIES CONTROLLED FROM BRITAIN ARE WORTH AT LEAST POUNDS STR 6 BILLION: AND THE TOTAL GROSS STOCK MARKET VALUE OF BRITISH OWNED, CONTROLLED OR MANAGED COMPANIES IS PUT AT OVER POUNDS STR 20 BILLION.
4.
NEVERTHELESS BRITAIN'S MARKET SHARE OF HONG KONG'S TOTAL IMPORTS IS A VERY DISAPPOINTING 2.2 PER CENT AND IS CONTINUING TO DECLINE QUITE RAPIDLY (2.5 PER CENT A YEAR AGO). THERE IS NO READY EXPLANATION AS TO WHY. FACTORS INCLUDE THE DISTORTING EFFECT OF EVERYONE ELSE'S MARKET SHARE OF THE VERY LARGE MARKET SHARE OF CHINA, THE PREOCCUPATION OF MANY BRITISH COMPANIES WITH EUROPE, BOTH THE COMMUNITY AND NOW EASTERN EUROPE, AND THE NARROWING OF BRITAIN'S OWN INDUSTRIAL BASE. BRITAIN'S CONSTITUTIONAL RELATIONSHIP WITH HONG KONG EARNS US NO COMMERCIAL FAVOURS WHETHER FROM THE PRIVATE SECTOR OR FROM THE HK GOVERNMENT.
5.
HONG KONG ECONOMY
OVER THE LAST 18 MONTHS, THE ECONOMY HAS SLOWED SIGNIFICANTLY. INFLATION CURRENTLY STANDS AT 9.3 PER CENT. THE HK GOVERNMENT HAS FORECAST A GDP GROWTH RATE OF 2.7 PER CENT FOR THE YEAR, A MODEST TARGET BY THE STANDARDS OF RECENT YEARS. THE FIRST HALF OF THE YEAR WAR PARTICULARLY SLUGGISH OWING TO A SLACKENING DEMAND IN MOST MAJOR MARKETS, AND DOMESTIC EXPORTS REGISTERED AN OUTRIGHT DECLINE OF 1.5 PER CENT IN VALUE TERMS WHILST RE-EXPORT GROWTH WAS DOWN TO 13.7 PER CENT FROM 37 PER CENT IN 1989. THE SIGNS OF A SLIGHT RECOVERY WERE IN PLACE AT THE START OF THE SECOND HALF OF THE YEAR. TRADE FIGURES FOR MAY SHOWED AN ACROSS THE BOARD
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