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thereof) would be damaging to sterling generally or
would create a "financing" problem would depend on the U.K. balance of payments position at the time and
on the general state of confidence.
Conclusion
22.
The broad conclusions are as follows:
(1) in itself the loss of Hong Kong, though 16
would involve some disruption pending
re-deployment of resources, should not, cnce
the impact effects had been absorbed, cause
more than marginal damage to the U.K. economy;
but
(2) some adverse effect on our experts to China
could
cox in any case be expected and if the loss
of Hong Kong were accompanied by a cessation
of trade with China this would significant ly
aggravato the problems of disruption and might
perhaps add up to £30 million to any balance
of payments loss arising from loss of Hong Kong;
(3) in so far as it proved expedient or necessary
to release any substantial part of the Hong Kong
sterling balances to China this could have
damaging effects, the scale and significant of
which would dopend on our economic circumstances
at the timo.
23. Finally it has to be remembered that the abovo
conclusions are on the basis of comparing the 1966
position with that which might obtain following loss of
Hong Kong In fact the economic value to the U.K. of
Hong Kong can be expected to diminish in the longer
rua 1.0, as the end of the Concession (1997) approaches ;-
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