CONFIDENTIAL
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£400,000 over the next four years to pay for British equipment in the projected technical institutes.
8. I think Mr Royle and I agree that there is no case for aid on financial grounds at present since Hong Kong already has very large financial reserves which are still being augmented, even after meeting the costs of its development programme. But Mr Royle has consistently pointed out that the grant of this money would galvanise the Hong Kong Government to go ahead with their technical institutes quickly and encourage local industry to subscribe. The trade promotion case is a difficult one for my Department. I am prepared to take account of British commercial interests in working out the aid programme, but I would not expect to institute an aid programme simply on trade grounds in a case where development had reached a level and was going ahead at a pace which did not justify the transfer of resources at the expense of the British taxpayer. This principle is as applicable to colonies as to other countries. In such a case, I would normally expect the Department of Trade and Industry, in concert with the British exporters concerned to look after our export interest; and if it thought it desirable on grounds of future business oppor- tunities, to provide a fund from commercial sources as was done in the somewhat similar case of the Indian Institute of Technology some years ago. I would not in the last resort rule out a contribution from the aid programme to
The such a fund, but I would much prefer to avoid it. Treasury would in any case have to be consulted. British commerce should be in a strong position to promote its business in a British administered colony.
9.
The political arguments which Mr Royle has put forward
I am bound to say, are probably not for me to assess.