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A plausible explanation for the decision would need to be given

which avoided reference to difficulties with LEGCO over financing

if the run down was not accelerated. (Use of this argument would

re-inforce existing worries that the Hong Kong government is no

longer "executive led".) As far as possible we should also take

account of the wider context of relations with China ove. Hong

Kong, including talks on constitutional development.

L

12. The majority of people in Hong Kong will welcome the

reduction in the costs of the garrison. Some however may

question whether an accelerated run-down reflected a lessening of

HMG's political commitment to Hong Kong. A few may express

concern at the removal of an immediate capacity to support the

police. In the UK there may be some focus on the wider picture

of the UK's ability to meet its military commitments. We will

also need to counter any perception that the more rapid rundown

implies a diminution of the UK's commitment to Hong Kong in the

last three years of our sovereignty in order to relieve

overstretch in the Army.

13. The announcement and public handling of such a reduction

would also require careful management, both in Hong Kong and in

the UK.

Finance

14. The Hong Kong government will benefit financially from these

proposals as a result of having to pay 65% of the costs of a

sharply reduced garrison. Initial calculations indicate that

this would generate savings for them of about £100m, compared

PA/S/2.033

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