CONFIDENTIAL

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rford M.Laird

Mr. Rippon's Visit to Hong Kong

Mr. Rippon visited Hong Kong from 11 to 14 September. I accompanied him. Before we left I asked Mr. David Wong, the Deputy Economic Secretary, to write a report on the visit to cover the main points which had been made to Mr. Rippon about the consequences in Hong Kong of British entry into the Community. This report has not yet arrived but I have telegraphed a reminder. In the meantime it may be useful if I put down one or two rather general reflections about the visit and what might follow from it.

The Constitutional Position

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2. It was strange, not to say eerie, to find that although Hong Kong is a British dependency, it has no British Government representative there. The Trade Commissioner, Mr. Blackwell, does his best within the limits set. To all intents and purposes the Governor is a virtually independent power under the Queen, struggling on one side with the problems of Hong Kong itself and its neighbours, trading partners and competitors, and on the other side with the British Government as a not always sympathetic body with respons- ibility for Hong Kong only through an accident of history. The Governor is of course backed and not unreasonably in this general attitude by his hierarchy of officials many of whom have spent their lives in Hong Kong. discussion with them it emerged that in many ways they were representatives of Hong Kong first and British second. The appointment of a high ranking British Government representative in Hong Kong could be very difficult. The Chinese could draw unwelcome conclusions for Hong Kong's status as a Colony. But the present situation is unsatis- factory, and some compromise might be found. It is hard to expect the present Governor or his successor to respect two loyalties which can be and in the case of the British EEC candidature are in conflict.

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In

Hong Kong Attitudes Towards the British EEC Candidature

3.

Hong Kong officials and businessmen were virtually united in their views on the British EEC candidature. They put the following considerations:

(a) Hong Kong made a substantial contribution to

the British balance of payments and had a favourable trade balance with Britain. It got very little in return;

(b) Any economic recession in the Colony would upset the present precarious political and social balance from which Hong Kong might not recover. This would be gravely damaging to the West as a whole.

CONFIDENTIAL

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