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5.

You say in your letter that the MTC will provide residential and day/weekend courses giving management and manufacturing technology training to graduates. The calibre of student

We the Centre will attract is as yet an unknown quantity. could run the risk of attracting only the 'eternal student' element for further study in the UK, while the real high-flyers go out and start/resume their careers.

You say that participants from Hong Kong, South China and

We should eventually Taiwan will be attending the Centre. be careful not to dilute the range and scope for Hong Kong scholarships in favour of candidates who may already have access to existing FCOSAS programmes in China, and Taiwan.

James Smith-Laittan says in his letter that without HMG's support there is reason to suppose that the nature of the training provided by the MTC is likely to change over time in a way which dilutes or even removes its value to Britain.

If the We wonder whether this is necessarily the case. British Council are to administer the centre, and British Universities provide the curriculum, we do not see how the presence or absence of our support for graduates from the Centre will affect the way the Centre operates.

James Smith-Laittan's letter mentioned (perhaps not as ominously as it read!) that the Hong Kong Government had sought "certain assurances on the financial feasibility of the project". This is obviously an area that will need particular scrutiny. As you know it is not possible for us to use scholarship funds (revenue) for capital costs.

It is hard to

identify any alternative source of official funds for such a purpose. Nor do we understand why it should be necessary for HMG to "buy its place on the policy board" (I assume it is not

In short proposed that HMG should get a share of the profits).

any the project will need to be viable in its own right: decision HMG makes about scholarships for graduates from the Centre would not have more than a marginal effect on the overall project. Or are we misunderstanding something?

But if we are

6. I hope this does not sound unduly negative. to consider putting a significant number of our eggs into the MTC basket later in the decade, we need to be convinced that it will support the weight. You will understand that in husbanding our diminished scholarship resources we need to make sure that we are getting the best value for money. If we are to do this, our possible involvement in the MTC will need to be given a good deal more thought. I will of course let you know the outcome of our discussions with the British Council here.

7. It is encouraging to know that in setting up a separate scholarship scheme with the private sector you believe we may be able to raise as much as £350,000 in matching funds. I have put down a marker in my 1993 TMR return for an extra £100,000 in scholarship money for 1996/97. There is no guarantee that the

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