SECRET

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14.

1

the recent Defence Costs Agreement because need to recon

cile the interest of HMG in reducing their

expenditure

and the interest of Hong Kong in obtaining a credible

&& (inducive contribution

commitment from HMG was comprehensible to the local

population. Public clashes of interest between HMG

and Hong Kong are rare; but when they do occur it is

important that the population should trust the

Governor to obtain the best possible terms for Hong

Kong.

If this trust were to be lost he would also lose his ability to influence and thus to govern. Consequently

his ability to achieve, for instance, social progress,

will lessen if he attempts to further policies in

any field which are not accepted as actuated primarily by care for Hong Kong interests.

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Dhr

The policies advanced in this paper nevertheless involve some adjustment in relations with Hong Kong which could well be resented there. Without corrective measures this could significantly affect the chances

of the general strategy, indeed it could lead to a

growth of the anti-British sentiment which could be

Colonial

corrosive of the link essential for Hong Kong's existance. It will be necessary to combat this by permitting a wide understanding locally of which our overall policy for the Colony and bydeveloping a greater awareness among Hong Kong Government officials of their

role in that overall policy. It will also be necessary

to counter a general anti-British sentiment: by an

active information policy. (Opinions on the extent of

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this differ: to anti-Whitehall and anti-British feelings

€31.Atoch

/generally

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