This uncertainty will affect Hong Kong's ability to raise the money required for rehabilita- tion and reconstruction and also for development. we were told last year that because of the uncertainty as to the future Hong Kong would not be able to raise money on the London market on the same terms as any other Colony, and I presume that thie is still the position. We have not pursued the matter because an attempt to float a loan for Hong Kong would probably give rise to a request for a statement about the future of Hong Kong, and might thus prove to be inconsistent with the decision to postpone the question of making a statement.
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the other hand, wo shall not be able to ruise all the money we require by local loans, especially if we are to go ahead with the construction of a new international airport.
The uncertainty will also have an adverse effect on any attempt to raise money locally for the University, and as the Treasury are unable to agree to any contribution from U.K. funds even for the limited objective of ro-establishment on the 1941 basis, it locks as though we shall have to make such an attempt.
There has not, I think, been any marked development in the activities of the Kuomintang to warrant a reconsideration of this question of the issue of a statement from that particular aspect, since the matter was discussed between Mr. Bevin and Mr. Creech Jones last May. But Kuomintang influence and activitics romain, I think, a powerful argwaent for the issue of such a statement. So long as we remain silent, they have more or less a clear field. And, although officially the Chinese Coverment is
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