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I.
CONCLUSIONS
British Interests (Paragraphs 3-19)
(a) Our present net annual expenditure on defence in
Hong Kong is of the order of £15 million rising
to an estimated £20 million after 1971 (assuming no change in the rate of the Colony's defence contribution). There are no other costs involved
in maintaining our position there, and 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.G's. interest to see
maintained.
(b) We derive considerable advantages from Hong Kong
and politically it has some value to us
in our relations with our allies, particularly the Americans.
(c) But Hong Kong could become a major liability if, as expected, its economy begins to run down towards the end of the lease or as a result of Chinese pressures. If it suffered a period of prolonged economic recession or stagnation, the Colony could become a major liability. Internal pressures and outside criticism
may build up because constitutional advance is a point
of friction in our relations with China. And we are obliged to maintain a garrison there which would be at
serious risk in the event of a Chinese take-over.
British Responsibilities (Paragraphs 20-27)
(a) We have a general responsibility to safeguard the
welfare and interests of the population of Hong Kong and a particular responsibility to about half the population who are British subjects (i.e. to some 2 million, nearly all Chinese). We have a special responsibility to some 100,000 200,000 Chinese ho would be particularly vulnerable to Chinese retaliation or to whom we owe a particular debt because of their connection with us.
THIS IS A COPY
THE ORIGINAL HAS BEEN RETAINED
IN THE DEPARTMENT UNDER SECTION
3(4) OF THE PUBLIC RECORDS ACT 1958
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