Effer fly Boles dr Mr By Paul our tone

to see der Gass's

merinte below

CONFIDENTIAL

N

12/10.

Seantay &

SECRETARY OF STATE'S BILATERAL WITH DEFENCE SECRETARY

11 APRIL 1991: HONG KONG PATROL CRAFT

Points to make

2. HID

Thank you.

There was no time to

- Understand financial pressure to withdraw the three love this Peacock class patrol craft in 1991/92.

But strong political arguments:

promt. Forgi Saveing tow this Jefence Search

that he's

Current mood

bad for Hong Kong confidence in UK commitment (and bitterness after £15 m Gulf contribution). fragile.

سلیم

raise

it next time ル

-

Chinese will see a trick to make it harder for them in

1997 to install the PLA garrison with naval element a key political concern for them.

practical problem of incursions by Chinese gun-boats, ignoring Marine Police instructions.

- media may raise Falklands precedent.

ке "/

- Difficult MOD/HKG official discussions. Bad feelings over 1988 Defence Costs Agreement (DCA) row: Governor believes impossible to persuade LegCo Finance Committee to contribute

more than DCA 65%.

Have asked Governor to reflect imaginatively on accounting solutions. But essential that MOD also show flexibility and

imagination if we are to reach agreement.

BAGAFM/1

CC

But the Sefs did case it in the margins & Cabinet. In thing indertook to see if the to be plane. The bull is in anything to be plane.

CONFIDENTIAL has

Ar

MODs Court

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