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I.
CONCLUSIONS
British Interests (Paragraphs 3-19)
(a) Our present net annual expenditure on defence in
Hong Kong is of the order of £15 millicn rising
to an estimated £20 million after 1971 (assuming no change in the rate of the Colony's defence contribution). There are no other costs involved
in maintaining our position there, and we have a sizeable investment in the Colony and a considerable
trade with it. It has accumulated large sterling balances which it is in H.M.G's. interest to see
maintained.
(b) Te derive considerable advantages from Hong Kong
(c)
and politically it has some value to us
in our relations with our allies, particularly the
Americans.
But Hong Kong could become a major liability if, as expected, its economy begins to run down towards the end of the lease or as a result of Chinesc pressures.
If it suffered a period of prolonged economic recession or stagnation, the Colony could become a major liability. Internal pressures and outside criticism may build up because constitutional advance is a point of friction in our relations with China. And we are obliged to maintain a carrison there which would be at serious risk in the event of a Chinese take-over.
British Responsibilities (Paragraphs 20-27)
(a) We have a general responsibility to safeguard the
welfire and interests of the population of Hong Kong and a particular responsibility to about half the population ho are Eritish subjects (i.e. to some 2 million, nearly all Chinese). We have a special responsibility to some 100,000 200,000 Chinese ho mould be particularly vulnerable to Chinese retaliation of to thom we one a particular debt because of their connection with us.
3(4) OF THE PUBLIC RECORDS ACT 1958 IN THE DEPARTMENT UNDER SECTION THE ORIGINAL HAS BEEN RETAINED THIS IS A COPY
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