SECRET
IT IS NOT SUGGESTED THAT HONG KONG'S ECONOMIC SITUATION IS WHOLLY ROSY, WAGES AND SALARIES HAVE, AS IN THE UNITED KINGDON, FAILED IN RECENT MONTHS TO KEEP IN STEP WITH PRICES. GDP PER HEAD IS STILL LOW (PDS.STG, 549 IN 1973-74). BUT IT CANNOT BE MAINTAINED THAT THERE DO NOT EXIST IN HONG KONG THE RESOURCES TO MEET THE COST OF HER OWN INTERNAL SECURITY. HER PRESENT CONTRIBUTION OF PDS.STG. 8 AND A HALF MILLION A YEAR REPRESENTS SOME 6.34 PERCENT OF GMP AND 3-4 PERCENT OF GENERAL REVENUE: CONTRAST UK DEFENCE EXPENDITURE (SOME S AND A HALF PERCENT OF GNP AND 15 PERCENT OF REVENUE). SHE DERIVES CONSIDERABLE BENEFIT FROM THE SERVICES' EXPENDITURE IN THE COLONY (SOME PDS,STG. 25M - PDS. STG. 30M A YEAR): AND ALSO FROM THE VALUE OF LAND RELEASED BY THE SERVICES FREE OF CHARGE TO THE HONG KONG GOVERNMENT (OVER 1966-1971 THIS AVERAGED PDS.STG. 3.75M A YEAR).
UNIQUOTE
CALLAGHAN
FILES
HEAD/HKIOD
HEAD/DEFENCE D
PS/PUS
SIR D WATSON
SIR G ARTHUR
MR MALE
2
SECRET
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