;
IN CONFIDENCE
DEFENCE
5.4 In view of Hong Kong's unusual position, security and defence are live issues and the armed forces play a significant role in the Colony's affairs. The garrison in Hong Kong consists of four
infantry battalions (three Gurkha and one British), a Gurkha engineering squadron, five naval patrol craft and a squadron of
RAF helicopters.
5.5 A Defence Costs Agreement was concluded between the UK and Hong Kong Governments in December 1975 under which the Hong Kong Government agreed to meet 50% of the cost of the garrison in the first year, 62% in the second year, and 75% in the third and succeeding years, the balance being found by the United Kingdom Government. The estimated annual cost of the garrison, at 1975 prices, is £42.5 millions. The Agreement, which came into force in April 1976, will run for seven years in the first instance and will be renewable
for further periods of five years on the same terms unless either government wishes to vary them.
5.6 In announcing the Defence Costs Agreement to Parliament on 19 December, hr William Rodgers IP, then Minister of State for Defence, said:-
"This Agreement is in the interest of both Governments.
For the United Kingdom it will provide a valuable contribution to the defence budget and for Hong Kong the assurance of a continued British garrison".
ANGLO-CHINESE RELATIONS OVER HONG KONG
5.7 The Chinese consider the Treaties relating to the cession of Hong Kong and the lease of the New Territories (paragraph 1.1 above) as "unequal treaties" forced on China during a period of internal weakness and they do not therefore recognise them. They regard Hong Kong as a problem left over from history, to be settled when the
/time
-
- 13 -