CONFIDENTIAL
026224
MDHIAN 91
(C) OUT TOTAL EXPORTS TO HONG KONG WERE POUNDS 1.25 BILLION IN 1990. THEY RISE BY A STEADY 10 12 PER CENT PA, IE THEY ABOUT KEEP PACE WITH INFLATION (NOW 12 PERCENT IN HONG KONG). IT IS OUR 17TH LARGEST EXPORT MARKET. BUT WE ONLY HAVE 2.5 PER CENT OF THE MARKET IN THIS OUR LARGEST COLONY, ALMOST OUR LOWEST MARKET SHARE IN THE REGION, AND WAY UNDER OUR WORLD AVERAGE. BY CONTRAST, IN MACAU, THE UTILITIES, FOR EXAMPLE, ARE REQUIRED BY STATUTE TO BUY 50 PER CENT OF THEIR CAPITAL EQUIPMENT FROM PORTUGAL (WITHOUT AUDIBLE CRITICISM IN MACAU OR FROM CHINA). HONG KONG BUYS FOUR TIMES AS MUCH FROM THE US AS FROM THE UK (AND EIGHT TIMES AS MUCH FROM JAPAN).
(D) THE POWER GENERATION SECTOR DESERVES SPECIAL ATTENTION. ITS LEADERS (LORD KADOORIE, SIR WILLIAM STONES, SIR SYDNEY GORDON, ALL CHINA LIGHT AND POWER, LI KA SHING, SIMON MURRAY AND EWEN YEE, ALL HK ELECTRIC, OR MALCOLM MATTHEWS, HK AND CHINA GAS) ARE LIKELY TO FEATURE IN THE SOCIAL GATHERINGS OF THE VISIT. ALL HAVE BOUGHT MASSIVELY FROM THE UK IN THE PAST FEW YEARS (GEC, BABCOCK, NEI, BALFOUR BEATTY). AS ILLUSTRATED IN MIFT, ALL PLAN HUGE FUTURE CAPITAL PROJECTS IN THE NEXT FIVE YEARS. EACH WILL GIVE THE EDGE TO BRITISH SUPPLIERS IF OTHER THINGS ARE EQUAL, AND NEED AND DESERVE OUR GRATITUDE AND EVERY ENCOURAGEMENT.
(E) CATHAY PACIFIC PERHAPS DESERVE EQUAL ENCOURAGEMENT: THEY MANAGE TO PUT ABOUT POUNDS 50 MILLION WORTH OF BRITISH EQUIPMENT ON TO EVERY BOEING 747 THEY BUY. NO OTHER AIRLINE, NOT EVEN BA, DOES THAT. THE PRIME MINISTER WILL ALSO MEET DAVID GLEDHILL, CHAIRMAN, AND PETER SUTCH, VICE CHAIRMAN. HE WILL ALSO TRAVEL BY MTR UNDERGROUND RAILWAY WHERE THE ROLLING STOCK IS SUPPLIED BY METRO CAMMELL, NOW GEC ALSTROM, AND IS ONE OF THE SHOW PIECES OF BRITISH EXPORTS TO HONG KONG.
(F) IF BRITAIN GETS A REASONABLE SHARE, SAY EVEN A QUARTER, OF HONG KONG'S PLANNED PROJECTS BUSINESS OVER THE NEXT FIVE YEARS, THE DEMANDS FOR ECGD COVER WILL FAR EXCEED THE RECENTLY IMPOSED COUNTRY LIMIT. IT IS IMPORTANT THAT WE GO AS FAR AS WE POSSIBLY CAN, PUBLICLY OR PRIVATELY, OR BETTER STILL BOTH, DURING THE VISIT, IN REASSURING BOTH BUSINESS AND GOVERNMENT THAT THAT IS NOT LIKELY TO BE A PROBLEM. OTHER NATIONAL CREDIT AGENCIES WILL TAKE A LEAD FROM ECGD: ANY FALTERING WOULD BE SEEN AS A MAJOR LACK OF CONFIDENCE IN HONG KONG'S FUTURE, IN POLITICAL AS WELL AS COMMERCIAL TERMS.
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