CONFIDENTIAL
But they do not accept the primacy of British
interests, particularly in finance and commerce.
There are therefore practical limits to the
Governor's power to ensure that Hong Kong adopts
policies to suit us.
3. The problem is partly presentational. Hong
Kong is conscious of its dependent status and lack
of representative institutions. This leads to an
exaggerated fear of lack of consultation and that
their interests will be disregarded. Good personal
and official relationships help, also consultations
at the earliest possible moment.
departments accept this. But, as in the recent
Whitehall
case of the sterling agreements, there are
inevitably times when short notice arouses
suspicions and resentment in Hong Kong. Our aim
should be to reduce the number of these occasions.
4. The Governor of Hong Kong has also represented
to me strongly that we should take account of the
cumulative effect on Hong Kong of too many disputes
at the same time. At the moment there are a
number of points of friction between us. We have
recently considered the question of the death
penalty. This is settled for the moment, but we
may still have difficulty over future executions.
The question of Hong Kong's sterling balances goes
to the root of the Colony's commercial ethic.
Partly
Their difficulties are largely their own fault, and partly the body of world conditions.
But they blame us, and complain of damaging delay
in consulting them about the future. Hong Kong's
industry competes for our internal market,
/particularly
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