SECRET

G

UK EYES A

8.

9.

(b) To graduate the Hong Kong contributions, with

the UK taking the whole share (£18m) at the

beginning of a period and Hong Kong picking up

this cheque at the end of the period.

Therefore:

Question 5 Do Ministers agree that we should

start negotiations on the basis of (a) above and

work out illustrative graduated schemes as at

(b) above as a fall-back position?

This leads to:

Question 6 Do Ministers agree that the study of

a reduced garrison should start now, with the

objective of opening negotiations with Hong Kong

after the introduction of their 1975/76 budget,

aiming at an agreement by May 1975?

SECRET

UK EYES A

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