6. Mr. Royle may mention Hong Kong's application to H.M.G. for a loan to assist in financing the development of Kai Tak Airport. If so, he will probably urge the importance of meeting this request, both for our commercial aviation interests and on grounds of demonstrating our confidence in Hong Kong's future. This application comes to us, however, at a very awkward time in view of the need to curtail overseas expenditure. The Secretary of State will wish to know that #r. Royle has recently discussed this application with Lord Shepherd; has been told that it is under examination by officials whose conclusions and recommendations will be submitted to Ministers as soon as possible; and has agreed not to press the 188ue for the time being.
Hong Kong Department, 12 March, 1969