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2.
in which a favourable negotiation would be
possible. Conversely we must avoid actions and
administrative proceduros in Hong Kong which
tend to highlight the diminishing term of the
Lease.
(a) is old, I think (b) is new. Hitherto the Hong
Kong Government has believed that the security risks
involved in forward planning were greater than any
advantages to be derived from it. My own view is that the
balance of advantage now lies in initiating a highly secret
but thorough look at the future. While I do not think
the critical period will commence before the second half
of this decade, the planning process will have to start now.
3. The fields I have in mind are: public works; Government
encouragement and guarantee of private investment; land
policy including auction of Crown Leases and terms of Crown
Leases; and budgetary policy. The latter would include
levels of reserves, the proportion of recurrent to non-
recurrent expenditure that is likely to be supportable,
and forward planning of the level of Government expenditure
beyond the present 5 year forecast period. Finally it will
be essential to assure an adequate expatriate cadre for the
police and administration, and some safehaven for the Chinese
who are administrators or police or associated with the
establishment and cannot risk staying. I have seen no
assessment of this number but it might be a quarter of a
/million
2.
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