TNAG-0255-FCO40-291-Contributions-of-Hong-Kong-for-costs-of-maintaining-military-1971 — Page 32

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Confidential.

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Type 1 +

From

Telephone No. & Ext.

Department

CABINET

Defence and Oversea Policy Committee

Hong Kong Defence Contribution Memorandum by the Foreign and Commonwealth

Secretary

Traditionally Hong Kong has made a contribution

to HMG towards the cost of its defence. For the

past four years this has been at the rate of £5 millions

per year, made up of an annual contribution of £1.5

million (fixed in 1958), plus a special additional

contribution of £3.5 millions, negotiated in 1966, the

was presented in Hong Kong total of £5 millions/being expressed as being "in aid

of the UK's balance of payments contribution". The

agreement under which the contribution was provided

expires in April 1971 and on the assumption that we

should continue to expect Hong Kong to pay a share of

its defence, it is necessary to re gotiate a new one.

In 1966 our predecessors carried out the

negotiation by sending the then Secretary of State for

the Colonies to Hong Kong. The negotiations were

carried out in an atmosphere of considerable opposition

2.

in the Colony to the idea of an increased contribution

order

of the other then being demanded and agreement was

only reached after long and difficult negotiations, at

one stage of which there was a real danger that the

Governor's unofficial adysers would tender their

resignation.

13.

Secret