TNAG-0275-FCO40-311-Development-of-Kai-Tak-airport-at-Hong-Kong-1970 — Page 74

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CONFIDENTIAL

7.

(c) the U.K. would be open to criticism

interntionally for failure to maintain

the airport to the standard which might

reasonably be expected by ICAO and by

the countries which have acquired traffic

rights at Hong Kong.

Although our interests have been spared

from damage by the Hong Kong Government's decision

I do not consider that we can regard the applica-

tion for og financial assistance as a matter

that is now closed. I have every reason to

believe that Hong Kong will continue to press

its case for U.K. financial participation.

It

is not too late for us to make an offer and for

the reasons set out below I strongly urge that

we do so.

8. We have had in recent years totake, in the

interest of our own economic position and

policies, measures which have affected for the

worse Hong Kong's interests or have been

considered generally in the Colony to affect

those interests for the worse. The most

striking, of course, was devaluation which meant

*

a loss of some £50 million in the purchasing power

of the Colony's sterling assets. But there have

been others such as our decision to switch in

1972 to a tariff rather than quantitative import

restrictions as the means of protection of our

cotton industry, which have been regarded in

Hong Kong as damaging to the Colony and on which

it is widely felt that we have not given due and

/proper

CONFIDENTIAL