8.

agreement on the future level of the garrison;

this will be reduced to 4 infantry battalions,

engineers, 5 naval patrol craft and a

helicopter squadron, resulting in a total

annual saving of over £20m compared to the

original garrison. Secondly the Hong Kong

Government accepted that in the future it

would have to bear a substantially higher

proportion of the total cost that it has in

the past.

3. The Hong Kong Government were naturally

anxious that we should recognise the

difficulties this will pose for them in

relation to their planned social expenditure.

We are taking this into account as well as

possible release of Hong Kong owned land

used by the Services, and some technical

financial points. Both Governments hope

to resolve these issues quickly and to make

a fuller announcement before the end of

the year.

ABILITY OF THE GARRISON

TO WITHSTAND DETERMINED ATTACK.

particularly

The presence of the garrison

along the border, helps to preserve the

territorial integrity of the Colony and

acts as a deterrent to border violations.

If pressed We recognise that the

Garrison could not withstand a very large

scale assault, but this happily appears to

be unlikely.

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