TNAG-2625-FCO40-3816-Visit-by-Douglas-Hurd--Secretary-of-State-for-Foreign-and-Co-1992 — Page 82

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Overseas Trade Services

SECRETARY OF STATE'S VISIT TO HONG KONG: 26-28 JULY 1992

UK/HONG KONG TRADE AND INVESTMENT

KEY POINTS

Hong Kong is still the UK's strongest base in the Far East, though in many respects rivalled by Singapore. Our involvement in Hong Kong touches almost every sector of the economy. The main UK commercial interests in Hong Kong are:

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As a market for direct exports: it is UK's 18th largest export market, with exports in 1991 of £1387m, an increase of 12% over 1990 compared with an increase of only 1% for UK exports to the world. (Exports in the period Jan-May 1992 are up by 22% on the previous year). The 1.2% of our total exports which went to Hong Kong in 1991 is over four times as much as we sold direct to China and over half as much as we sold to Japan, which has an economy 49 times the size of Hong Kong's. UK imports from Hong Kong were £2,148M in 1991.

As a market for services: UK companies have a very large presence in Hong Kong's invisibles sector, with revenue estimated to be at least equal to the value of UK's visible exports.

As a location for investment: British investment and managerial involvement are a major overseas influence in Hong Kong business. UK statistics record a net stock of over £2 bln of direct investment (local business estimates the total net assets of UK companies controlled from Britain as at least £6 bln and the total gross stock market value of British owned, controlled or managed companies at over £20 bln). UK is the 4th largest investor in Hong Kong's (relatively small) domestic manufacturing industry. [NB UK statistics record a net disinvestment of £195m for Hong Kong in 1989, the latest available data.]

As a gateway into Southern China. 3 million workers are employed in some 19,000 Hong Kong factories in Guangdong Province, compared with a manufacturing workforce of under 700,000 in Hong Kong itself. UK has only 2 manufacturing investments of significant size in Southern China United Biscuits (biscuits) and Tootal (textile goods). Shell have signed an MOU for the construction of an oil refinery which will be the largest single overseas investment in China.

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