SECRET

Paragraph 4

(i)

Amend the first two sentences to read as follows:

"For the reasons I have explained, we are satisfied that this step is right on its merits. But it happens also to be the case that our own economic situation is such that we need to make a rapid and very substantial move to correct the anomalous

situation which has developed as regards your contribution to the defence of Hong Kong.

字窨

(ii) Insert the following after the third sentence:

"I do not want to labour our problems. At the same time I should be remiss if I did not indicate the magnitude of the situation with which we are faced.

(iii)

(iv)

Paragraph 5

Delete the sentence "With your own traditions ... cannot continue.

Delete the last sentence, if only in the interests of brevity.

X

Paragraph 6

(i)

Delete the sentence "I do not want to go Review." and the first six words of the next sentence which would then begin "The Review proceeded

Defence

(ii)

Delete the sentence "It is not necessary ... Government decided." and the word "But" at the beginning of the next sentence which would then start with "We announced

...

21

In the first sentence the words "felt and" should be deleted and "effect" replaced by "impact".

Paragraph 7

(i)

Amend the first three sentences to read:

"In Hong Kong's case we are proposing two steps. The first, as I have said, is to limit our contribution te 25% with effect from the first year of the new agreement. The second is to limit the size of the garrison to what you and we are agreed seems to be really necessary.

(ii) The fourth sentence beginning "We have there fere

" could be deleted.

undertaken

2.

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