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slightly the rate of increase this year, verall the programe
was still a very impressive one. It was agreed that it was
necessary for the Government to continue each year to reiterate
its plans for increased expenditure in this field.
Hong Kong Garrison
5. The Governor described his discussions with the Secretary of
State for Defence (see attached telegram and record of conversation).
He stressed his view that it would be impractical to expect British
Ministers to authorise any increase in real terms in the expenditure
they were already making on the garrison. He would do his best to
make this point in Hong Kong but he still expected difficulties,
for instance from Sir Y K Kan. I Cortazzi said that in his view
we must be prepared to support the Hong Kong Government in the
maintenance of a more than nominal contribution from the UK
Government although it was open for discussion whether the
right figure might be 15% of 20% or some ther level.
Air Services
of
6. It was agreed that no action was necessary on the question
of whether CPA or British Caledonian should fly on the London
route since the hearings of the CAA were adjourned to 25 January.
There would be an opportunity to discuss this with the Secretary
of State for Trade when he visited Hong Kong at the end of the month.
US/Hong Kong Textiles Agreement
7. The Governor expressed gratitude for Ministerial support but
it was agreed that, apart from our commenting on the American attempt to compare the bilateral Agreements with the US and the EEC,
HMG could do no more for the present.
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COVERING SECRET