CONFIDENTIAL
V
"confrontation" prisoners in Hong Kong. It has been recommended to the Foreign and Commonwealth Secretary that the Governor be asked to review the position with a view to releasing "well over half" of the prisoners in the near future and the remainder within a year or so.
Paragraph 26. In 1970 the balance of trade between Hong Kong and the UK moved in our favour, partly because of an improvement in our exports to Hong Kong but also because of a drop in our imports from the Colony (Hong Kong exporters seem to be finding it more difficult to sell textiles to us).
Paragraph 30. It is a particularly sore point in Hong Kong that we felt unable to help them with a loan towards the extension of Kai Tak airport (the contract for the extension has gone to the Japanese). We still, of course, control the traffic rights at Hong Kong. We are trying to persuade the ODA to provide £400,000 for the purchase of equipment for four new technical institutes. Nothing, however, should be said about this at
present to anybody in Hong Kong.7
Paragraph 31. The surplus in the financial year 1969/70 was over £30 million. There was considerable criticism about this in the Colony when the figures were revealed. It seems likely that a similar, if not larger, surplus will be produced during the present financial year.
Paragraph 32. Hong Kong's sterling assets now stand at about £535 million. Mr. Haddon-Cave told me in confidence when he was here before Christmas that he would not be surprised if by the end of 1971 Hong Kong sterling assets did not rise to £600 million 7
2
CONFIDENTIAL