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HONG KONG
[117 Hong Kong consists of three areas:- (a) Hong Kong Island, which China ceded to Britain in perpetuity in 1842; (b) Kowloon and Stonecutters' Islands, which were similarly ceded in 1860; and (c) the New Territories, which China leased to Britain for 99 years in 1898 and which form by far the greater part of Hong Kong. Hong Kong is of considerable economic value to China, as an outlet for
manufactured goods and as the regular source of more than one-third of her foreign exchange earnings. For this reason, and despite the philosophical objections that the Chinese hold to the manifestations, on what they regard as their own territory, of Hong Kong's highly capitalist economy, they have made it clear that they are content with the status quo.
[127 There is a British Garrison in Hong Kong which serves, inter alia, two important purposes:-
(a) it is a visible sign of Britain's commitment to Hong Kong's continuing existence in its present form; and
(b) it provides the potential to deal with a threat
to Hong Kong's internal security.
During 1976 this Garrison was reduced to four infantry battalions (three of which are Gurkha), an engineers squadron, five Naval patrol craft and a RAF helicopter squadron. Under the terms of the Defence Costs Agreement (DCA) which came into effect on 1 April 1976 and will last for seven years in the first instance, the Hong Kong Government pay an increased share of the cost of the Garrison, rising from 50% in 1976/77 to 621% in 1977/78 and 75% thereafter.
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