you would be under heavy local pressure to get out
of sterling, and we would equally be under pressure
to tell you not to do so. A formal agreement,
with all the strains of negotiation and maintenance,
would be better than a constitutional row. The dog
of "Hong Kong must do what it is told because it is
a dependency" is sleeping in Whitehall because we
take care to keep it so. But, as you well know, it
is by no means dead. Moreover, given that we want
to strengthen on both sides the realisation of the
interdependence of Hong Kong and Britain, it would
look odd, to put it no higher, if all the
independent holders of sterling chose to come
under the umbrella of an agreement, and Hong Kong
did not.
However, we can leave this philosophising until we
see the shape of what is on offer after March next
year.
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