•
thereof) would be damaging to sterling generally or
would create a "financing" problem would depend on
the U.I. 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 it
would involve same disruption pending
re-deployment of resources, should not, onos
the impact effects had been absorbed, cause
more than marginal damage to the U.I. economy;
but
(2) some adverse effect
(3)
our exports to China
can in any case be expected and if the loss of Hong Kong were accompanied by a cessation of trade with China this would significantly
aggravate the problems of disruption and might perhaps add up to £30 million to any balance
of payments loss arising from loss of Hong Kong
in so far as it proved expedient or necessary
to release any substantial part of the Hong Ko
sterling balances to China this could have
damaging effects, the scale and significant of
which would depend on our economic circumstanc
at the time.
23. Finally it has to be remembered that the above
●onclusions 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.I. of Hong Kong can be expected to diminish in the langer
run --
- 1.0, as the end of the Concession (1997) approache
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