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B.
The advantages and disadvantages of our position in Hong Kong
(e) The cost of maintaining forces in Hong Kong should be presented on a similar basis to that used in the defence expenditure studies.
(f) The Ministry of Defence had a number of comments on the military section, especially on the reinforcement and supply of our forces, which they would send to the Commonwealth Office.
(g) It was right to give prominence to our intelligence interests in Hong Kong since these were not widely understood. Their importance was very largely as a facet of our special relationship with the United States. Reference to the South East Asia Treaty Organisation in paragraph 4 was
perhaps inappropriate.
(h) The reference in paragraph 11 to the aircraft repair facilities overstated
the case.
(i) Our exports to Hong Kong were of the same order as, not greater than, our exports to Japan. The comparison made between our earnings of profits and dividends in the Colony and payments of interest on its sterling balances
was not valid.
(j) The difficulties created by the preferential entry and competition of Hong Kong exports of textile and other goods to Britain were largely political rather than economic. We derived some economic advantage in being able to obtain cheap supplies from Hong Kong. It was an exaggeration to say that cheap Hong Kong exports had caused us embarrassment in our relations
with other countries.
(k) The assessment in paragraph 18 that we derived some political benefit from our presence in Hong Kong should be elaborated. While our presence in Hong Kong brought political benefits to the West generally, it was not clear whether the United Kingdom obtained a net political benefit.
(1) We had met little criticism of our inability to introduce representative political institutions. The United Nations Committee of Twenty-Four took
little interest in Hong Kong.
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