TNAG-2170-FCO40-3107-Hong-Kong-annual-review-for-1989-and-1990-1990 — Page 50

CONFIDENTIAL

FM BTC HONG KONG

TO DESKBY 21100OZ FCO

TELNO 81

OF 21090OZ MARCH 90

CONFIDENTIAL

10

інсо

HKD 011/2

105652

MDHIAN 2184

ASTRY

19 JUL 1990

DESK OFFICER

INDEX

STRY

PA

Action Taken

INFO IMMEDIATE DTI, HONG KONG, UKREP JLG HONG KONG

90 HKC 121/1

19

YOUR TELNO 37: ANNUAL REPORT ON HONG KONG 1989 TO PARLIAMENT: HONG

KONG/BRITAIN ECONOMIC RELATIONS

1 I SUGGEST A PARAGRAPH AS FOLLOWS:

THE ECONOMIC LINKS BETWEEN HONG KONG AND BRITAIN ARE EXTENSIVE, VARIED AND IMPORTANT TO BOTH. IN 1989 BRITAIN'S EXPORTS TO HONG KONG TOTALLED POUNDS 1.1 BILLION, A TOTAL EXCEEDED ONLY BY JAPAN AND INDIA IN ASIA. INVISIBLE EXPORTS PROBABLY MORE THAN DOUBLED THAT FIGURE. HONG KONG FOR ITS PART EXPORTED ALMOST POUNDS 2 BILLION WORTH OF GOODS TO THE UK. THE BRITISH COMMERCIAL PRESENCE AND BRITISH INVESTMENT IN HONG KONG ARE VERY EXTENSIVE. OVER 400 BRITISH COMPANIES ARE ESTABLISHED THERE, THROUGH WHOLLY OWNED SUBSIDIARIES OR JOINT VENTURE COMPANIES. IN ADDITION THERE ARE VERY SUBSTANTIAL BRITISH STAKES IN MANY OF HONG KONG'S LARGEST COMPANIES, SUCH AS JARDINES, SWIRES, HONG KONG TELEPHONE COMPANY AND THE KADOORIE GROUP, WHICH ARE BRITISH MANAGED AND HAVE VAST BRITISH SHAREHOLDINGS. IN MANUFACTURING INDUSTRY BRITISH FIRMS ACCOUNTED FOR 9 PERCENT OF THE TOTAL INVESTMENT IN 1988, BUT IN ADDITION A VERY LARGE NUMBER OF BRITISH COMPANIES HAVE INVESTED, AND PLAYED A VERY SUBSTANTIAL ROLE, IN THE PROFESSIONS, SERVICE INDUSTRIES AND THE RETAIL TRADE. PUTTING A TOTAL FIGURE ON BRITAIN'S STAKE IN HONG KONG IS DIFFICULT, BUT THE STOCK MARKET VALUE OF BRITISH MANAGED AND CONTROLLED COMPANIES IN THE TERRITORY HAS BEEN ESTIMATED AT POUNDS 20 BILLION, AND IT IS REASONABLE TO ASSUME THAT MORE OR LESS ALL OF THESE PRODUCE SIGNIFICANT RETURNS TO THE UK. THERE ARE ALSO SUBSTANTIAL CAPITAL INFLOWS INTO THE UNITED KINGDOM FROM HONG KONG OF WHICH POUNDS 2 BILLION CAN BE

IDENTIFIED IN THE PAST TWO YEARS.

HEAP

YYYY

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