CONFIDENTIAL
could be changed would be return it to Communist China and
it is not politically possible to do that now. It is also
true that the process of return would engend er enormous problems.
At the same time, Hong Kong is fortunately economically
prosperous and is thus, apart from the defence cost, no real
burden on us. On the assumption that,if Hong Kong were not
as it were we might not be able to place our exports to it
elsewhere, whereas the imports we receive from it probably
would come from elsewhere, there is on balance some advantage
to us in the trading relationship, and the colony provides
an opportunity for business enterprise for many of our subjects.
But all in all, the balance seems to me to be a fairly neutral
one; it is neither a great burden nor a great asset.
The
and it will be
3. My own feeling, however, is that we should distribute
this despatch to the Treasury, DTI and Ministry of Defence,
and also print it. No 10 should also have a copy.
Governor is entitled to have his case heard;
worthwhile seeing what reaction the despatch brings. The point
here is that if the Governor's somewhat rosy view is not
challenged, then he may believe that it is accepted here and
that the position of Hong Kong in relation to the UK is stronger
than it in fact is. This could lead to miscalculation in
future which I should prefer to avoid if we can. He will now
be visiting the UK in December and we might have a talk with
him about our reactions to the despatek then.
27 November 1973
E Youde
CONFIDENTIAL
P.TO.