259) Dd.897459 250m 12/72 G.W.B.Ltd. Gp.863
941) Dd.897300 250m 9/72 G.W.B.Ltd.
Gp.863
NOTHING TO BE WRITTEN IN THIS MARGIN
SECRET
discussion by us in Hong Kong of most of the problems
It also
that have been complicating our relationship.
means that, when we achieve a solution of any of these
problems, we must rely on your information services and
your officials to make the best of it. Personal
relations help of course, and I believe we are beginning
to get these right. But the need to maintain your
Government's credibility in Hong Kong obviously limits
the amount your officials can do. We shall doubtless
hear more of this problem and I would be glad of
your thoughts on how it could be tackled.
Sterling Balances
As you will know, the Treasury have now agreed
to an MSP of 80% for Hong Kong for the interim period
up to March 1974. Our officials have worked hard for
this, which was your own official proposal, and I hope
you can welcome it.
As for your view that Hong Kong and UK/Hong
Kong relations would in the long run be better off
without a guarantee, you will be able to discuss the
financial implications with Barratt of the Treasury
next week. I know the Treasury take the view that
the guarantee is, in normal times, a valuable safeguard
for the recipients, which should not be lightly cast
aside. (Incidentally Barratt will know nothing of
your earlier suggestion to Duncan Watson, on the same
subject, as our officials decided not to muddy the
waters of Treasury consideration of the interim
arrangement.)
As far as our political relations are concerned,
I can see the attractions of responsible freedom, but
I still wonder whether in fact it would lead to less