TNAG-0289-FCO40-325-Departmental-briefs-on-Hong-Kong-1971 — Page 179

SECRED

SECRET

Bonent by tien

Inture

900 strong of whom approximately one third are Europeans.

The reliability of these forces could not be depended upon if

Coubt arose about British intentions and ability to retain

control of Hong Kong or if disorders occurred after a

prolonged period of subversion.

}

23. The Colony has paid an amual cash contribution to

Imperial Defcnco cinco 1863. In 1958 this was fixed at

£1. per annum. Under the current agreement (which was

negotiated in 1966) the Colony pays £5m. per annum. The

defence contribution has always been a sensitive issue in

our relations with Hong Kong since the Colony has been the

only dependent territory to have made regular and subataniicl

payments; and the 1966 negotiations were carried through by Mr. Fred Lee (then Secretary of Stato) with great difficulty.

The current agreement expires in March, 1971, and we are

already in correspondence with the Governor preparatory to

opening negotiations for a new agreement.

TRADE AND INDUSTRÍ

24. Hong Kong's prosperity prior to 1950 rested on the

With the advent of entrepot trade, principally with China.

#

In

a Communist Government in China this trade dwindled rapidly

and in ita placc industry has assumed a dominant role. 1949 Hong Kong's total trade (imports and exports) was £317m: in 196) it was £2,011m. Since Hong Kong has to

export to live it has long been the policy of the Government

to live

to maintain free entry for all gooda from abroad other than

to maintain

afew-store on which "there"

tarife for revenue purpose

SECRET

SECRET

/ 25....