SECRET
commitment and with Ministers' preferred option.
ut, if the Governor's advice is correct, it would be likely to be rejected by Hong Kong's Finance Committee, a wholly unofficial body. Any attempt to coerce the self-supporting Hong Kong Government in a financial matter would be without constitutional precedent and could put our interests in Hong Kong
under severe strain.
9
(b) To accept a llong Kong contribution of £17 m. a year with an escalation clause linked to the minimum defence assessment of £40 m. This would however mean a Hong Kong contribution of little more than 40%. The difference between this and a 75% contribution would have to be found within the severely reduced defence budget.
(c) In this situation the Governor proposes, reluctantly and very much as a second-best, that we should consider a further reduction in the garrison to about 4 teeth-arm units. The total implications of such a garrison for the security of Hong Kong would have to be studied. Linked to the proposed Hong Kong contribution of £17 m. the arrangement would imply the UK paying more both in proportion (50% rather than 25%) and in cash (£17 m. r: ther than £10 m.) than Ministers' preferred option.
On
the other hand it would not give Hong Kong a majority interest in defence matters affecting the garrison.
(a) To cut the cost of the garrison to a point at which a Hong Kong contribution of £17 m. would represent 75%. In capability this would fall far short of what is at present seen as the minimum military requirement.
C.
"
Para. 9. A new paragraph on a graduated
contribution.
ODORET
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