TNAG-0098-FCO40-134-Construction-of-a-Cross-Harbour-Tunnel-1968 — Page 144

NOTHING TO BE WRITTEN IN THIS MARGIN

Dd. 32855 Ed (4200)

5. I am disappointed that you should consider

H.M.G's. offer to back, as to 50%, a Hong Kong

Government guarantee as having lapsed.

It

seems to me that inasmuch as there may be

circumstances in the present Hong Kong situation

requiring the Treasury and E.C.G.D. to press

for a Hong Kong Government guarantee of the loan

there would still be a case for a public gesture

by H.M.G. in support of the Hong Kong Government

with a view to bolstering confidence in the

Colony's future.

pursuing this now, since in my view it is very

doubtful that the Hong Kong Government would now

agree to give a guarantee on any terms, if such

a guarantee should still be required. I would

But I see little purpose in

add that it would be an act of folly to tell

Hong Kong that H.M.G's. offer is withdrawn unless

it becomes absolutely necessary to do so. I

hope we never have to do so, but to do it now

would unnecessarily exacerbate relations already

strained in the aftermath of devaluation.

6.

I am writing separately in reply to

Cotterill's letter of 23 February asking for

views on Hong Kong as a ten year forward risk.

7. I am sending copies of this letter to

Cotterill (E.C.G.D.) and Gowers (Board of Trade).

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(w.5 barker)