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PRIME MINISTER
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Or
Goodfellow then p.a.
A
Hong Kong: Shipping
In his undated minute of November 1972 Michael
Heseltine sent you his comments on Mr. Y. K. Pao's suggestions about shipping matters in Hong Kong. I believe that we should
look at these suggestions in the context of our overall
interests in Hong Kong.
2.
During my recent visit there I was struck by the extent to which officials and unofficials, while acknowledging that
Hong Kong is nothing without Britain, believe that we use the colonial system to promote British interests at the expense of Hong Kong. These fears are mostly groundless and spring from the relationship of an administering power and an economically developed dependency. But it is true that we have recently been
involved in a series of decisions where the interests of HMG
have seemed to override those of Hong Kong.
Further
3. For example, we have had to insist upon restrictions on imports of cotton textiles and polyester cottons.
arguments are looming about cutlery and knitwear. We still
(although I hope this can be resolved) control the traffic
rights at Hong Kong's airport, built with their money, largely
in the worldwide interests of our own airlines. Hong Kong's
fiscal reserves available for development have been reduced by up to a quarter (the equivalent of £19 per head of population) as a result of the floating of sterling. We are therefore about
to begin difficult financial negotiations. Finally we are
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