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5. IT WILL BE HELPFUL TO HAVE YOUR COMMENTS ON THE PROS AND

CONS, AS SEEN FROM YOUR POINT OF VIEW, OF THESE OPTIONS.

6.

A FURTHER PROBLEM THAT WILL NEED TO BE RESOLVED IS THE

QUESTION OF HOW THE COSTS OF RETAINING A NAVAL PRESENCE AFLOAT IN HONG KONG WOULD BE MET, IF THAT IS WHAT IS DECIDED. IT IS QUITE CLEAR THAT THE MOD WOULD NOT BE WILLING TO PAY FOR SUCH A

PRESENCE IF ITS RETENTION WAS BASED ON POLITICAL RATHER THAN

MILITARY CONSIDERATIONS. THEY WILL ARGUE THAT THE COST SHOULD

FALL OUTSIDE THE DCA. THIS RAISES FINANCIAL IMPLICATIONS FOR THE HONG KONG GOVERNMEWNT, ON WHICH YOUR COMMENTS WILL BE WELCOME. IN PARTICULAR, WE SHALL BE GRATEFUL FOR AN ASSESSMENT OF WHAT VIEW THE FINANCE COMMITTEE MIGHT TAKE ABOUT A PROPOSAL THAT THE NECESSARY ADDITIONAL FUNDS FOR THE RETENTION OF A NAVAL PRESENCE AFLOAT AFTER 1991 SHOULD BE FOUND BY THE HONG KONG GOVERNMENT.

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