R-CED IN
REGISTRY N.2
-9 FEB 1972
CONFIDENTIAL
HKK 5/12
Brief No 8
1.
SECRETARY OF STATE'S VISIT TO HONG KONG
FEBRUARY 1972
AID TO HONG KONG
(DEFENSIVE)
Hong Kong receives virtually no financial aid from HMG.
Since the end of the last war, with one or two exceptions, it has
run a substantial surplus on the recurrent budget, from which it
has financed its own development expenditure, which has been on a
massive scale. In recent years the Colony has enjoyed a
spectacular boom (budget surpluses of £14 million in 1968/69;
£31 million in 1969/70: £44 million in 1970/71). Revenue has
jumped from £131 million in 1967/68 to an estimated £215 million
in 1971/72.
2. Hong Kong is the largest single holder of sterling assets.
Those assets stood at £682 million at the end of September 1971,
comprising official funds (£299 million) and private funds
(£383 million) held for residents and banks.
3. It is a sore point in Hong Kong that we have not felt able
to make regular aid allocations to the Colony. Our reason is that
they have been able to manage without. However, the Colony may
now be entering a period of deficit financing. The Government has
very large commitments towards such future projects as the
development of the public assistance scheme, the expansion of
secondary and technical education, housing for squatters and others,
the extension of Kai Tak Airport, desalination plants and
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CONFIDENTIAL
/reservoirs