TNAG-2968-FCO40-4247-Future-of-Hong-Kong-British-Consulate-General-inclusion-of--1993 — Page 18

MOLD 406/13.

RECE

2 3 NOV 1993

LIS

INDER

MY

Reference

tile.

Mr Wootton, RFD

HONG KONG:

1.

BRITISH CHAMBER OF COMMERCE

I was grateful for RFD thoughts on the rent which should be charged the British Chamber of Commerce in the Consulate General building.

2. I have reservations about the "land value" element (your paragraph 2 iii) which RFD would like to see figure in equation used to calculate the Chamber's rent. One reason is that, if we get to the stage of asking the Hong Kong Government for a modification of the Private Treaty Grant, they may well charge a premium, which the Chamber would have to meet, for the use of the land and we could hardly charge them twice over! I have already mentioned this to Mr Popple- stone and agreed to await OED's comments and land value estimate before going over this in detail. In Mr Smith's absence, I have drawn your minute to Mr Whittle's attention.

3. It might nevertheless be helpful if I put my point of view. I accept that Treasury guidelines are needed in this area, and that the various elements you mention represent a sensible basis for working out charges in many situations where the FCO charges or is charged for the use of facilities. But I do not consider that applying a land value recovery charge makes sense in the Hong Kong circumstances. Ministers wish to have a substantial building in Hong Kong which will house a British presence and represent our continuing commitment to Hong Kong. The Chamber can contribute towards this.

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4. We consider that the Chamber has a special role to play, dovetailing with that of the Commercial section of the Consulate. The British Trade Commission (BTC) and the DTI have been working closely with the Chamber over the past two years to help the Chamber fit itself for the role it will play after the transfer of sovereignty. British business in Hong Kong will then in effect be operating in a foreign. environment. There is much that a properly targeted Chamber can do as an authoritative and effective voice to represent British business in a number of practical ways in Hong Kong and China. This is not to suggest that there will be duplication with the Commercial section of the Consulate, indeed one of the advantages of collocation would be a continuation of the present close relationship to the advantage of furthering British commercial interests in Hong Kong and Southern China. The Chamber's strategic plan "Preparing for 1997" (which I can let you or copy adressees have if you would find this helpful) sketches out the way forward (the then Senior British Trade Commissioner was appointed a member of the Strategy Committee appointed in 1991

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