in Hong Kong mi, ht produce consequences which no-one could predict
subce
In subsequent discussion it was pointed out that
the
Ion in Onina was very fluid and 1t could not be ruled out that it might develop in a way favourable to our position in Hong Kong. If we held on we might eventually be able to negotiate our withdrawal. For example, if the In luence of the central government were weakened the authorities in Kwantung might adopt more reasonable policies towards Hong Kong.
4. The Foreign Secretary then said that he understood that 1, we lort Hong Kong the Chinese would lose 1200 million in foreign exchange. Ho seked mi u we would lose.
rs. Hart replied that there would probably not be much differe o teween our gains and our losses There was not a great deal of British investment in Hong Kong. Fit ritish banks had a big stake and Hon. Kong
Jedzthy pointed out that Hong Kong more or Less paid for itself. The only chrge on H.M.G. was the cost of our troops and Hong Kong was now contributing 65 million a year to this. He went on to say however, that it har Kong's economy turned down the cost to us could be very severe. If foreign demand for Hong Kong's exports fell there would be unemployment and the cost to the British Exchequer in relter would be formidable,
5. Sir Paul Gore Booth said an important factor in the situation was the degree to which Peking could allow the local communists in Hong Kong to suffer a defeat, Peking mi, ht, eventually decide to accept the loss of face involved in accepting a setback in Hong Kong and lay off for a year or two. Sir D Greenhill said that on the other hand the Chinese Convainit Party might need a success in 1967 as a cointer to the play the Russians would make with the 50th annivorrary of the Revolution, The kind of success they
SECRET
/needed
THE ORI
IN THE EY
THIS IS A COPY
IN RETAINED
ERATION
3(4) OF THE PUBLICT CORDS ACT 1958