6
CONFIDENTIAL
proper opportunity to Hong Kong to make her case.
Now that Hong Kong has transformed itself into a
centre of manufacturing industry and in conse-
quence has become a competitor of the United
Kingbm industry, both in our domestic market and
abroad, we must expect to be faced with similar
clashes of interest in the future. But the
impression, which has become widespread in Hong
Kong as a result, is that Britain is disinterested
in the territory. This in turn leads to a fall
in confidence, which, as you will know, is the
dynamism which keeps the Colony going. This
lack of confidence and disillusionment with
Britain plays straight into the hands of China
and of the local Communists by giving them an
opening to furthertheir main aim which, as we see
it, is not to turn us out of Hong Kong, but, while
destroying the confidence of local people in us,
to hold us there in subservience to themselves
of much
as a provider which needed foreign exchange.
人
If
we could occasionally make a real gesture towards
Hong Kong (such as responding to the request over
Kai Tak) it would go far to reverse the feelings
which have grown up there towards HMG and avert
the political risks involved in them.
9.
There are other reasons why I could hope we
could be more sympathetic to Hong Kong's request.
We have, I suggest, every reason, even in our
present improved position, not to encourage
feelings of disillusionment and chagrin on the
part of the major overseas holders of sterling.
CONFIDENTIAL
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