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16. Hong Kong's advorso balance of visible trade with the world has boon financod mainly by incono from invisiblos including tourism, shipping, banking and commercial sorvicos and through the flow of capital funds from abroad (mainly from overseas Chinoso o.. in the U.S.A.). No prociso balance of payments figuros are available for tho Colony but it sooms unlikely that, ovor the years, it has run any pronounced overall balance of paymonts deficit or has thoroforo boon a drain on the storling aroa foreign
oxchange rosorvcs.
17. Apart from the cost of maintaining military forces in the Colony, Hong Kong is solf-supporting. It is not in receipt of any financial assistanco from H.M.G. other than an intorest froo loan of £3 million mado available in 1957 towards the extention of Kai Tek Airport.
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18. Political. It is considered that some political benefit is derived from our presenco in Hong Kong. Its people possess a relatively high standard of living for the Far East and it serves to demonstrate that there is an alternative system to Communism which works successfully,
19.
Our presence there is a British contribution to inter-dependenco. The Americans recognise its usefulness.
20. There are on the other hand a number of political disadvantages in our position. China's attitude that the Colony is Chinese territory to bo takon back in due course precludes us from treating it as a candidate for solf-government or independence. We are inhibited from developing representative institutions by the dangor that any politics in Hong Kong would be the politics of the two Chinas and that a determined Communist minority in a generally apathotic electorato would engineer control of such institutions. Thore is a widespread awaroness of those problema, both within and outside Hong Kong; but the form of govornmont prescribed for this thriving and progressivo community doos stand out as a startling anomaly in our post-war record of colonial administration.o como extent it shoula possible to moot oriticism on this score and to provide a reasonable dogrod of popular participation in government by dovoloping fully representativo lesal government institutions, and stops to this and are now being taken.
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Our position in Hong Kong makos us vulnorable to pressures_from China aimod possibly at influonoing our policios oloowhoro (o.g. our support for Amerion), although thoro has boon no cluar indication so far that prosauro has been so applied,
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