TNAG-0255-FCO40-291-Contributions-of-Hong-Kong-for-costs-of-maintaining-military-1971 — Page 26

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to take any soundings as to the likely reactions of his unofficial advisers to the suggested figure of £71⁄2 million

He has no idea

for the Colony's defence contribution.

of what those reactions are likely to be, and has

proposed this sum to us as being the maximum that he

might hope to persuade his unofficial advisers to

accept.

(5) 50% of the 4 million population of Hong Kong are

under the age of 21 years. It is estimated that the

rate of expansion in industry must be sufficient to

provide employment each year for 100,000 school leavers

entering the labour market.

(6) Unlike countries such as Taiwan and South Korea (two of Hong Kong's chief trading competitors), the

Colony has no natural resources of its own and no

basic agricultural economy on which it can fall back to

provide a subsistence economy for its inhabitants in

the event of a trade recession.

(7) Hong Kong's economy is entirely dependent on the

skills of its people and on its ability to trade with

the rest of the world. Moreover, the Colony has so

many natural economic disadvantages

apparent lack of

security, lack of an internal market, distance from

foreign markets, lack of local sources of raw materials

that some substantial advantage (eg low rates of

taxation) is necessary to attract and retain investment

capital as well as to keep export prices competitive.

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