Mr. Carter
CONFIDENTIAL
NFIDE
59
Hong Kong Finance
The Governor mentioned to the Minister of State and to the Secretary of State this week his concern about the peak of expenditure Hong Kong was likely to face in 1972/73.
2.
This prompts me to record rather belatedly a discussion I had with Sir Hugh Norman-Walker on my last night in Hong Kong
about the level of Hong Kong's reserves. He said to me that, though Hong Kong was criticised from time to time as to the level of its reserves, he estimated that in the next five years they
would have to face extra expenditure under the following heads
Re-development
8860m.
P.W.D.
Housing
$590m.
8860m.
High Island Dam
Total
$940m.
$3,250m.
223,437.650
3. This would run down the reserves considerably apart from any
effect which a recession in world trade might have on the ability
to continue to make the same contribution to reserves as was
being done currently.
4. He added that so far from Hong Kong's reserves being considered high, by the former ratio of reserves to annual revenue which used to be laid down for Colonies by the Colonial Office, they were open
to criticism as being too low.
5. (I confess that I am not aware of the standard ratio which
used to be applied to the relations of reserves to annual revenue;
and that I have a feeling that with the amount of revenue raised
in a place like Hong Kong this policy is hardly applicable.) I have thought it right however in view of the Governor's
conversation with Ministers to let you have this more detailed exposé of the way the Hong Kong Administration are approaching
the question of their reserves.
LAST PADER
ливот
(L. Monson)
28 November, 1969
CONFIDENTIAL
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