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Ministers have also approved the stationing of a small unit of fighter aircraft in Hong Kong, "subject to further examination of the possibility that these aircraft might be manned and
serviced from local resources.
19. The full budgetary cost of the forces we now maintain in Hong Kong is about £20 million a year; it is estimated that after 1971 it will be £25 million a year (excluding the cost of a small unit of fighter aircraft, the provision of which is under examination). In cash and services Hong Kong currently
contributes to defence at the rate of £5 million per annum under an agreement which runs until March, 1971.
Conclusion (a)
an estimated
It costs us nothing to maintain our position in Hong Kong, apart from our present net expenditure on defence of the order of £15 million rising to £20 million after 1971 (assuming no change in the rate of the Colony's defence contribution). We have a sizeable investment in the Colony and a considerable trade with it. It has accumulated large sterling balances which it is in H.M.Q's, interest to retain.
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