TNAG-2783-FCO40-4002-UK-business-interests-in-Hong-Kong-Chinese-discrimination-ag-1993 — Page 32

mnbunten1904

CODE 18-77

Mr Bunten

Hong Kong Dept

HICC 012/4

RECO

..PK 1993

مل

Reference...

28A

See (29

LETTER FROM SIR FREDERICK BENNETT

1.

You asked for a contribution. along the lines of the following:-

I suggest something

"The changes that have been achieved in the Chinese economy since the beginning of the Open Door policy in the late 1970s are, indeed, impressive. Even in the last 18 months, China has made rapid strides towards a market economy, although it retains sufficient of its State trading apparatus to be a problem in GATT negotiations and, as you note, there has been minimal political reform.

As to Britain's performance in this expanding market, it is true that we have not perhaps done as well as some of our major competitors. However, British exports to China rose 20% in 1992 and there has been a strong revival of interest in the market. In October 1992, Mr Needham and Lord Prior led a 100-company trade mission organised by the China-Britain Trade Group and we will be following up the success of that mission this year.

It is in the interests neither of Britain nor of China to allow our difference over Hong Kong to spill over into other areas of the bilateral relationship and, despite Chinese threats in March, there does not appear to have been any significant impact on bilateral trade. Chinese exports to Britain are roughly double British exports to China and, were the situation to escalate, China would have more to lose".

L Bristow-Smith

Far Eastern Department

19 April 1993