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(c) The desirability of attracting inward investment from Hong Kong has been increasingly reflected in our immigration and nationality policy. For example, in 1988 at the request
of the former Prime Minister, the Senior British Trade
Commissioner was instructed to ensure that any Hong Kong businessmen who expressed interest in settling in the UK
were made aware of the flexibility enjoyed by potential investors within our existing immigration rules. This policy of discreet encouragement for inward investment was carried a stage further last year when a special category for entrepreneurs (500 places) was created in the British Nationality (Hong Kong) Act.
(d) Since 1985, one third of the companies listed on the
Hong Kong Stock Exchange, including Jardines and the
Hong Kong and Shanghai Bank, have redomiciled or moved their holding companies abroad. Against this background, it is difficult to argue that efforts to attract outward investment for long-term commercial reasons are potentially destabilising. If the Chinese were to raise any objections, however, we could point to the fact that, despite large capital outflows from Hong Kong in recent years, there is no shortage of investment capital in the territory (indeed the outflow of capital has been largely matched by capital inflows); that Hong Kong's economy has benefitted substantially in terms of new export markets and large invisible earnings; and that the stability of the Hong Kong
Dollar has not been affected.
The scope for attracting investment
8. It is difficult to estimate exactly how much investment
from Hong Kong might be attracted to the UK if we were to
relax our existing guidelines. But it is likely to be on a fairly small scale in comparison with Hong Kong's massive
investment in Southern China, not to mention
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