Adysuitaxes and Disadvantages of out forition in Hon Fons
0. Conclusione
(a)
Sudala hal maluating
bediant f
I've obmany
(b)
(c)
(4)
At the present time it costs us nothing to
maintain our position in Hong Kong (apart from
our net expenditure on defence).
haro
sizeable investment in the Colony and a
considerable trade with it. It has accumulated
large sterling balances and is not considered
to be a drain on the sterling area foreign
exchange reserves.
Se derive substantiel advantages from it as
a centre of communications and for intelligence
operations, and politically it has some value to
us in our relations with our allies, particularly
the Americana.
But the economy is very vulnerable in the
event of advɛrue world trade conditions and
Chinese presmares, In a period of prolonged
economie recession or stagnation, the Colony
could become a major liability. Internal
pressures and outside criticism may build up
because constitutional advance is inhibited.
Our position in Hong Kong is an impediment to the
development of better relations with China.
And we are obliged to maintain a garrison there
which would be at serious risk in the event
a Chinese takeover.
Hong Kong provides China with easy access
to the free world – for trade, travel and
subversive activitien, In our handa it is
considerable economic value to China, accounting
for about a third of its total foreign exchange
earningaj
{but,
but, as China's economy develops,
that value may diminish.
/ (8) ***
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