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here can quantify, individual companies no doubt could.
2.
Priston in his minute to you of 21 August has already pointed out some of the problems he forsees on the trade front. From the purely political point of view we agree with Hong Kong that an agreement which ignored Hong Kong's interests, especially if it did not similarly ignore those of other lependent territories, is likely to have an adverse effect on confidence in the Colony. This is a risk which we are particularly anxious to avoid: with the approaching expiry of the New Territories lease the whole question of Britain's continuing commitment to Hong Kong is a highly sensitive issue.
It
3. Any benefits to flow from an agreement are likely to be Long term and the real purpose of it when it was first proposed was to obtain exemption from port taxes for British ships. was also thought that it could be useful in putting some substance into our relations with China. That argument no longer holds good and the former in our view gives us insufficient return for considerable cost. We would not therefore want to resume negotiations with the Chinese for a netropolitan territories only agreement or one which would nake Hong Kong a second-class citizen. There is a certain amount of scepticism in any case that suitable written assurances could be obtained and we would not wish to press 30 hard for them or for acceptance of our draft as it stands, that the whole thing would become an irritant to our otherwise flourishing relations. It would not therefore seem appropriate to take any initiative with the Chinese to resuscitate discussion on the agreement.
4.
The suggestion of our trying to obtain a suitable
on cargo carrying statement of some kind in 'the context of the draft economic agreement has already been taken up of course and we now await a response from Peking. Personally though, I wonder how far we shall get. There have been no signs of a change in Chinese policy. On the contrary, all the signs point to them maintaining their current attitude. Their purchases of new and secondhand vessels during the past 12 months have
With been considerable, several of them from UK owners. foreign currency at a premium for major plant purchases it
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