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Hong Kong's intelligent policy of cultivating such people had
paid dividends and there were now many people in the Government,
the House of Commons and Whitehall who could be counted as
friends of Hong Kong.
STERLING
3. Mr Woo said that, in their sterling guarantee, they needed
more room for manoeuvre. It was not sufficient to be able to
Ideally
diversify out of sterling only 11% of their reserves.
they would like the figure to be 50%. In addition, it would be
much better if the guarantee could be expressed in Hong Kong
dollars, rather than US dollars, but he feared that this might
cause the Treasury difficulty. Mr Royle agreed that this might
be difficult for the Treasury. However, the Governor was at
present discussing the whole issue with the Treasury, and
Fir Haddon-Cave would be able to have talks with the Chancellor
and his officials in Nairobi and Dar-es-Salaam. The present
arrangement was of course an extension of the existing agreement.
He realised that the agreement between Hong Kong and their banks
was a separate issue. He was well aware of Hong Kong's anxieties,
especially over MSP. The Governor and Financial Secretary had been
doing an excellent job in keeping us informed. Within the
inevitable constraints upon us, we would certainly do our best to
help the colony. Mr Woo agreed that it would be best to await the
outcome of the talks between the Governor and the Treasury, and
those in Nairobi and Dar-es-Salaam. But members of ExCo and LegCo
/were