DEPARTMENT OF TRADE AND INDUSTRY BOARD OF TRADE
COMMERCIAL RELATIONS AND EXPORTS 1 Victoria Street London SW1
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27
January 1971
Railway.
E O Laird Esq
Hong Kong Department
Foreign and Commonwealth Office London SW1
CONFIDENTIAL
Dear the Laird
2
I refer to our telephone conversation concerning your letter of 15 January and the draft reply by Mr Royle to Mr Wood's letter of 4 January concerning your proposal to make a grant of £400,000 to Hong Kong. Frank Toms has asked me to confirm the points I made on the phone.
2.
Our main comment is that the draft does not deal with the ODA objections
(a) that £400,000 for one colony's budget is a lot of money to find;
(b) that it could only be found at the expense of another country's aid.
3. We suggest that you should replace the section dealing with the other calls on Hong Kong's resources with a passage the object of which would be to show
(a)
(b)
that because spread over 4 years, this sum is not so large as it seems;
that there ought to be a possibility of finding it from some savings in the first year and making due provision in later programmes. Alternatively there may be some contingency provision in other parts of the aid programme which would avoid having to reduce another country's allocation in order to help Hong Kong in this way.
4. We do not think that the trade advantages need any further elaboration because the Japanese have found this sort of gesture well worthwhile. We do not see the money as directly related to promotion but (as the draft indicates) as a gesture aimed at countering the Japanese penetration. We therefore need go no further than say that aid is not necessarily judged on purely developmental grounds. Under the guidelines we are already entitled to have some regard to its commercial benefits. Although we know there are many calls on our aid, if the money can be found we think this is a worthwhile cause.
K'C Price
NKK 9/
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