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we have in mind, namely the provision by H.M.G, (aithor in whole or in part) of the capital cost and the assumption by Hong Kong of the rocurrent expandituro. This would seem to be a suitable project for

financing from the Higher Education Allocation of C.D. & W. funds.

If a joint project on those lines were agrood, it might be possiblo

to oarmark a proportion of placos at the institution for regional uso (if language difficulties can be overcomo), the places being filled on our nomination by suitablo trainoos from other countries.

D.

Military Costs

Some

ocnoorn and fooling has been aroused in Hong Kong by indications that the Colony is to be charged for a number of servicos performed by the Services in aid of the civil power during confrontation. This would cause resentment in Hong Kong in viow of the recent agrood sottlemont of the defence contribution issue. I do not think wo should raise such charges, unless the justification is vory cloar indeed. This is being takon up with the Ministry of Dofonce.

An expensivo additional item is the second frontior fence that is being erectod sono distanco from the tru boundary in order to control a possible flood of rofugoos from the mainland. Tho wiro for this is being provided by the Servicos at a cost in the region of £150,000. While I agroo that this would not be a proper charge on defonco votos since the purpose of the wire is to koop out rofugees, I considor there is a strong caso for H.M.G. to share the cost with Hong Kong. I suggest that wo might accopt responsibility for the cost of the wire loaving Hong Kong to cover labour and compensation costs: this is being taken up with the Treasury.

E. Opening of Plover Cove in September/Octobor 1968

The Plover Cove Water Schono is one of the most impressive water projects in the world and it would be vory fitting, if the security situation permits, that it should bo oponed by a Royal personago.

Co-ordination of Publicity/Information Policy

When the trouble started in Hong Kong wo made arrangements for close contact botwoon the Hong Kong Government Information Services and tho departments horo concornod in order to ensure that our own information services are geared up to aid Hong Kong in the publicity and propaganda fiold. Wo are reviewing and strengthening those arrangements.

G. Support for Hong Kong's Export Credit Guarantdo Corporation

Hitherto wo have not felt allo to noot Hong Kong's roquest that our diplomatic roprosontatives should provide Hong Kong's recently established Export Credit Guarantoo organisation with all the information they nood

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