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SECRET
IMMEDIATE
4. The first qualification is that there are certain areas of Hong Kong's economic and financial policy-making which directly engage the British national interest not simply in political
terms but in terms of hard cash. There are three current
examples of this:
a) A certain banking matter, which we are discussing separately.
b) Export credit, where HMG is being asked to provide cover in
excess of what is financially prudent in global terms, not
simply to bolster the prospects of British business but to
demonstrate to the international financial community as a whole that the present sovereign power has full confidence in the
management and prospects of Hong Kong.
c) Civil service pension arrangements, where HMG is trying to decide what arrangements are appropriate for Hong Kong HMOCS against an extensive past practice in respect of other colonial territories, which in some respects has explicitly placed Hong
Kong and other rich territories in a category apart.
These issues are no doubt but a harbinger of future concerns
which will require decisions about hard cash in London. It is
not unexpected, therefore, that those who manage the British national resources should be taking a closer interest than
before in our policy over Hong Kong which is bringing these
issues up for decision.
5. The second qualification is of course the fact that
result of the Joint Declaration we are committed to a much
greater degree of Sino-British consultation about Hong Kong than in the past. Up until now we have been able to refer to the
Joint