CONFIDENTIAL
I
•
this project the Hong Kong Government should be told (by British Ministers) "quite firmly that this order cannot be permitted to go to the Japanese, but that if this decision were to result in Hong Kong suffering financial loss HMG would try to compensate for this in some measure by providing favourable financial terms" He has suggested that the effects of this order going to the Japanese (as, in his view, it will if the project is allowed to follow its normal commercial course) might easily have serious political repercussions. "The Colony would almost certainly fall into the Japanese economic sphere of influence. The reactions of Peking to this development might also be serious for the political future of the Colony." FE Department do not support this view.
Nor do I.
13.
CRE of the DTI have told Mr Blackwell that, in their view, it would be counter-productive for HMG to appear to be leaning too hard on the Government of Hong Kong to adopt a transport system which they are not sure they want and it would be disas- trous to make an offer on finance that we could not in the event fulfil. They flatly disagree with Mr Blackwell's assess- ment that "progress can only be made on a Government to Govern- ment basis".
14. My own view is that the CRE are right, and I have drawn on Mr Toms' letter to Mr Blackwell of 9 November in preparing the draft of the letter for the Governor.
H
21 January 1971
сс
Mr Wade-Gery (FPAD) Mr West (EPD)
Mr Morgan (FED)
@infile HKK 21/8
EMaria
É O Laird
Hong Kong Department
Much of the back correspondence on
which you may well
want
file HKK 21/8 which is
Mihairo's secondary
2.1
To real
this
is
attached behind
submission.
not convinced that there is any
need to circulate the Naft letter to the goverar for
comment by all
addition of mine.
letter from DTI
I suggest
3
3.
CONFIDENTIAL
C
the Depts. Para 3 therest is Para 4 quotes verbation from KM: Blackwell. If you agree
4.
the letter to the Tsy.
The file referred t
alove
/ contains
حملة
Page 120Page 121