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We have been represented as dealing a series of blows to the Colony's
trade and finances in recent years. It should be said that perhaps
most of these measures were unavoidable and that in any case the
adverse effects were not as great as Hong Kong feared. But in some
cases the manner in which they were introduced could have been
improved upon and in others it might have been possible to give a
little more weight to Hong Kong's interests without appreciable effect
on our own objectives. We should take care to match our adverse
actions with some well publicised gestures of support and concern for
the Colony. The proposed UK contribution to the development of
Kai Tak airport (which it has been decided, having regard to other
claims on our funds, we cannot pursue at present) is a case in point.
We certainly cannot afford to continue to convey the impression that
has gained ground in Hong Kong of Britain's indifference or lack of
concern. A collapse of confidence could be sudden and would be
We cannot therefore take chances and must maintain
irreversible.
a substantial safety margin when assessing the effects of our actions
in the Colony.
6. As regards the fifth recommendation (possible consultation with
the Americans), although the State Department have shown great
understanding of the delicacy of the Hong Kong situation, once our
confidences are fed into the American Government machine we cannot
be sure that they would be discreetly handled. It would be a
disaster if our intentions became known, for example, to American
business enterprises engaged in Hong Kong. Officials will need to
look very carefully at the pros and cons of this.
7. The sixth recommendation does not perhaps adequately reflect
the full extent of the studies that are proposed (on the Governor's
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