CONFIDENTIAL

SECRETARY OF STATE'S VISIT TO HONG KONG: 30 JUNE

BRIEF NO 5 :

REINFORCEMENT

1. Following the Governor's discussions with Ministers, the

Secretary of State for Defence announced on 20 June that

reinforcements were being despatched to Hong Kong to help

control illegal immigration from China. The reinforcements

consist of an infantry battalion from the United Kingdom and

two companies from the Gurkha battalion in Brunei, together with

helicopters, hovercraft, a fast patrol boat and supporting

personnel. Some of these additional forces will already have

arrived in Hong Kong by the time of the Secretary of State's

visit. The bulk of the deployment should be completed by

mid-July.

OUTSTANDING PROBLEMS

2.

a) Costs. The 1975 Defence Costs Agreement between the

United Kingdom and Hong Kong Governments provides for the

costs of the garrison to be shared, with Hong Kong paying

75% and the United Kingdom 25%. The Hong Kong Government

take the view that as the Agreement envisaged that the

garrison would be reinforced when necessary, the cost of

reinforcements should be shared on the same basis. The

Secretary of State for Defence has argued that the Hong

Kong Government should be pressed to pay the entire costs

(which could, on Ministry of Defence calculations, be as

high as £60 million). Our view is that while it may be

appropriate for Hong Kong to pay more than 75% for some

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CONFIDENTIAL

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