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KONG, THUS MAKING IT CLEAR THAT IT LEAVES OUT A LOT OF OTHER

BRITISH INVESTMENT.

6. ON PARA 5 OF YOUR TELNO 38, THE ORIGINS ARE NOT ENTIRELY CLEAR OF HOLLOWAY'S ESTIMATE THAT BRITISH PORTFOLIO INVESTMENT AMOUNTS TO

30 TO 40 PER CENT OF MARKET CAPITALISATION OF LISTED COMPANIES IN

HONG KONG. THAT TOO APPEARS TO HAVE BEEN A KESWICK FIGURE. IN ANY EVENT WE HAVE NO RECORD OF ANY OTHER SOURCE. THUS KESWICK'S FIGURES

OF 30 PER CENT IS PRESUMABLY MORE RECENT AND MIGHT THEREFORE BE

SUBSTITUTED.

! T

7. PARA 3 OF YOUR TELNO 47 ASKS THE ORIGINS OF THE POUNDS STERLING

2 BILLION FOR CAPITAL INFLOW INTO THE UK IN THE LAST TWO YEARS. THAT ALSO IS A KESWICK FIGURES (POUNDS STERLING 2,035M AND RELATING TO SIGNIFICANT INFLOWS) AND IS MADE UP OF THE HONG KONG BANK'S

PURCHASE OF 14.9 PER CENT OF MIDLAND (POUNDS STERLING 383M) AND 100

PER CENT OF JAMES CAPEL (POUNDS STERLING 100M): CHEUNG KONG'S

POUNDS STERLING 200M INVESTMENT IN CABLE AND WIRELESS: JARDINE'S

PURCHASE OF KWIK SAVE (POUNDS STERLING 165M): CABLE AND WIRELESS'S

SALE OF HONG KONG TELECOM SALES (POUNDS STERLING 140M), PARK LANE

HOTEL'S PURCHASE OF THE CHURCHILL HOTEL (POUNDS STERLING 100M): SIR

Y K PAO'S PURCHASE OF POUNDS STERLING 200M IN SHARES IN STANDARD

CHARTERED BANK (SINCE SOLD): AND CABLE AND WIRELESS'S SALE OF HK

TELECOM SHARES TO CITIC (POUNDS STERLING 750M). AGAIN IT DOES NOT PURPORT TO TELL THE WHOLE STORY CHENCE SIGNIFICANT'') BUT THE

FIGURES ARE VERIFIABLE (THOSE WITH WHICH WE ARE FAMILIAR ARE

ACCURATE, AND I ASSUME THEY ALL ARE AFTER SOME ROUNDING).

الله امراه

8. YOUR TELNO 38 PARA 3 ASKED FOR COMMENTS ON THE CPU STUDY OF EARLIER THIS YEAR ON THESE ISSUES. THAT PAPER, IN MY VIEW, UNDERESTIMATED AND WROTE DOWN THE SIZE AND THE VALUE OF BRITAIN'S

STAKE IN HONG KONG. I COULD MAKE A CONSIDERABLE NUMBER OF DETAILED

POINTS BUT WILL CONFINE MYSELF TO A FEW OBSERVATIONS. MY MAIN POINT

IS THAT BY GOING THE ROUTE OF NARROW DEFINITIONS AND USING OFFICIAL PUBLIC SOURCES, THE NET RESULT COMES OUT AT SOMETHING WHICH IS VULNERABLE TO ATTACK, BECAUSE IT CAN BE SHOWN THAT BRITAIN'S STAKE IN HONG KONG IS INDEED GREATER. THE PAPER, FOR EXAMPLE, REJECTS THE ''BRITAIN OWNED, CONTROLLED OR MANAGED' CONCEPT. AS I HAVE SOUGHT TO SHOW ABOVE, DESPITE ITS LIMITATIONS, I BELIEVE THIS HAS A DEFINITE USEFULNESS. ALTHOUGH I DO NOT WANT TO GET INTO DETAIL, THERE ARE ALSO SOME UNFAVOURABLE COMMENTS ON BRITISH COMPANIES AND BRITISH COMMERCIAL PERFORMANCE WHICH MUST BE REBUTTED. E.G. PARA 34 SAYS THAT UK COMPANIES HAVE PERFORMED DISAPPOINTINGLY WHEN SPECIAL ATTEMPTS HAVE BEEN MADE TO ENCOURAGE THEM. I HAVE IN FACT SEE NO

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