CONFIDENTIAL COVERING SECHIT
2
The Figures to be used
If you agree, I propose, in order to simplify matters, to supply Lord Goronwy-Roberts with the "currency analysis" but not the "country analysis" attached to your minute. I wonder, however, whether it is not possible to supply figures up to, say, the end of 1976 or the beginning of 1977. You will see that Mr Barratt's letter of 23 June 1976 to Mr Cortazzi contained an estimate of Hong Kong's sterling holdings, official and private combined, of £179m at mid-May 1976, compared to 227m at the end of 1975. Incidentally, this latter figure looks higher than yours for the value of sterling assets using an exchange rate of 11 - KR/10.1. Mr Smith also supplied a statement of Hong Kong sterling assets at the end of December 1976 with his minute of 15 February. Would it be possible therefore to provide the same kind of analysis as you have already prepared up to the end of 19767
Fiscal Reserves
7. I note from paragraph 6 of Hong Kong telegram No 214 of 2 March, which contains a summary of the Financial Secretary' budget statement that day, that Hong Kong's "fiscal reserves" at 1 april 1976 amounted to HK/2,810m. I take it that this figure has no relevance to the enquiry that Lord Goronwy-Roberts has made but should be grateful for confirmation.
8.
I am sending copies of your minute and its attachmentu to the recipients of this minute. Mr Reith will wish to note that the long kong Government's investments in South Africa account for less than 1% of their total overseas investments. incidentally, there has been no reply from the Governor to ir Murray's letter of 22 February. Mr Murray and Mr Stewart, both of whom will be in Hong Kong later this month, are briefed to raise the matter with the Governor.
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16 March 1977
cc: Mr liall (FRD G60A/G)
Mr Reith (CADE 309)
D F Milton
Hong Kong Department K 247
233 4381
CONFIDENTIAL COVERING SECRET