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TO IMMEDIATE GOVERNOR HONG KONG TELNO. 415 CF 1 MAY.
YOUR TELNO. 490: REVIEW OF DEFENCE CONTRIBUTION.
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1. STUART'S LETTER MAINLY EXPLAINS THE REASONS FOR PROPOSING TECHNICAL DISCUSSIONS NOW AND THE POSSIBLE ARGUMENTS TO THE CONTRARY. IT SEEKS THE GOVERNOR'S CONFIRMATION OF THE TIMING. THINK DECISION ON THIS POINT OF PRINCIPLE:UST AVAIT LETTER'S ARRIVAL.
WE
2. THE TECHNICAL POINTS FOR DISCUSSION ARE THAT PSA ESTIMATE THAT TC CARRY CUT EXISTING PROGRAMME AN EXTRA HK DULLARS 80 M. WILL BE NEEDED BY MARCH 1976 ASSUMING INFLATION CONTINUES AT RECENT RATE WHEREAS WE UNDERSTAND THAT ABOUT HK DOLLARS 37 Y. WAS REGARDED DURING OMG'S RECENT VISIT AS A UM CONTRIBUTION WHICH HONG KONG MIGHT BE PREPARED TO CONSIDER. IT WAS, HOWEVER, THEN RECOGNISED THAT OTHER FORMULE WERE OPEN FOR DISCUSSION.
CALLAGHAN
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