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UK/Hong Kong relations
4.
Over the past 2 years or so, Hong Kong has proved a positive
factor in the development of Sino/British relations. It is also
an important market for British exports (although there is still an
imbalance in trade) and a valuable asset in civil air services
negotiations. But the British connection with Hong Kong also has
disadvantages, particularly conflicts of economic interests, and
the potential immigration and other problems which would result
if China were to take over Hong Kong.
5. In fulfillment of our defence responsibilities, four infantry
battalions together with naval and RAF units are stationed in Hong
Kong. Seventy-five percent of the cost is borne by the Hong Kong
Government.
6.
Relations between Britain and Hong Kong require careful
handling. The British image of Hong Kong is as far removed from
the facts as the view of Britain held by many people in Hong Kong.
The impact of competition from Hong Kong exports, particularly
textiles, upon employment in Britain has aroused strong feelings.
In Hong Kong, there is a widespread feeling that the United Kingdom
does not do enough to defend Hong Kong's interests internationally.
But there are no major bilateral problems at present.
Internal Developments
7. Over the past few years the Hong Kong Government has carried
out an important programme of social developments, with housing
as the first priority. The Government has also mounted a major
campaign against corruption. This, and the rapid growth of the
Hong Kong Police Force in recent years, resulted in a near mutiny
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