TNAG-2749-FCO40-3964-Economic-situation-in-Hong-Kong-1993 — Page 138

FCO40 Hong Kong Department Records 聯邦事務部香港部檔案 All

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неврал

to be reminded of He liečivations & the exerite

Mr Ricketts Mr Morris 4

IMPLICATIONS OF A BREAK WITH CHINA FOR BRITISH COMPANIES: DTI

TRAWL

Further to the recent Treasury paper on Hong Kong, I attach further work by the DTI on implications of a break with China for British companies.

1.

2. You may like to see in particular the letters from John Meadway and David Hall. On the information available, Mr Meadway suggests that the most vulnerable companies are: (1) Trafalgar House, (2) Costain, (3) Cable and Wireless, (4) Rolls Royce. He also suggests that what is really required is a "market analysis" type of study and that the Bank of England is best placed to do this.

3.

Mr Hall considers there are too many unknowns to make any meaningful assessment. I agree. His tentative observations are: BICC/Balfour Beatty and GEC Alsthom would be unlikely to be badly affected; AMEC would be likely to be hurt, but not disastrously; Costain cancellation of HK contracts could be serious (but surely very unlikely); Trafalgar House position would probably depend on how Jardines were affected.

4. I spoke to the Treasury. They have not yet decided how they propose to handle the new information from DTI, but have promised to let us know as soon as they do.

Annadele Bouch.

HKB 090/

ANNADELE BOUCH

HONG KONG DEPARTMENT

WH 303 270 2653

2 APRIL 1993

Min.Tre .AB

CODE 18-77

RECEIVED IN REGISTRY

Eck

REGISTRY

IN

PA

Action. Pakso.

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888-231

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