SECRET

063640

MDHIAN 8326

SECRET

FM HONG KONG

TO IMMEDIATE FCO

TELNO 1649

OF 241004Z MAY 91

AND TO PRIORITY PEKING

INFO PRIORITY UKREP JLG HONG KONG

CORRECTED VERSION PARA 2 LINE 1

YR TELNO 996: ROYAL NAVY PRESENCE AFLOAT

1. WE AGREE IT WOULD BE USEFUL TO MEET NEXT WEEK. THE HONG KONG TEAM COMPRISING ASPREY, WOTHERSPOON AND FROST WILL ARRIVE LONDON IN THE MORNING OF 30 MAY, AND WILL BE AVAILABLE FOR DISCUSSIONS ON THE AFTERNOON OF THE SAME DAY AND ON FRIDAY, 31 MAY.

2.

WE SHARE YOUR VIEW THAT THE REDUCTION IN THE NUMBER OF

PATROL CRAFT SHOULD PROVIDE THE CORE ON WHICH AN AGREEMENT MIGHT BE BASED. WE ARE NOT WELL ABLE TO PROPOSE AREAS IN WHICH SAVINGS MIGHT BE MADE IN OTHER PARTS OF THE GARRISON, SINCE THE EFFECT ON OPERATIONAL CAPABILITY IS PRIMARILY A MATTER FOR MOD AND HQBF.

3.

IF THIS ISSUE IS TO BE RESOLVED BY ALL PARTIES SITTING ROUND THE TABLE, IT IS IMPORTANT THAT WE SHOULD KNOW, AND BE ABLE TO CONSIDER IN ADVANCE, ANY OTHER IDEAS WHICH MOD HAVE IN MIND. WE SHALL REVIEW THE SALE OF STOCKS SUGGESTION, THOUGH WHETHER THERE IS ANY MILEAGE IN THIS LARGELY DEPENDS ON MOD ESTIMATES OF RESIDUAL VALUE. WE HOPE THAT YOU CAN ASK MOD TO BE MORE PRECISE ON THE OTHER IDEAS THEY PROPOSE FOR DISCUSSION. BUT WE SHOULD BE UNDER NO ILLUSIONS THAT ANY PROPOSAL WHICH REQUIRED US TO SEEK FINANCE COMMITTEE'S APPROVAL FOR EXPENDITURE BEYOND THE AGREED 65:35 APPORTIONMENT IS UNLIKELY TO BE A STARTER.

WILSON

YYYY

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