CONFIDENTIAL
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has stressed how important these institutes will be in providing enhanced opportunities for the rising generation and the contribution they will make to Hong Kong's effort to diversify her industry and improve her technology. These efforts will be crucial if Hong Kong is to sustain her industrial growth in the face of growing competition. 4. Mr Royle was told of the Japanese Government's promise to supply, free of charge, technical equipment to the value of US$1,200,000 over the next three years to the Hong Kong Polytechnic. In these circumstances we would not wish the four proposed technical institutes also to be supplied with foreign equipment, but the Senior British Trade Commissioner in the Colony has said that, if Britain does not assist, the equipment is likely to be provided by the Japanese and possibly also by the German Government, so that the new generation of Hong Kong engineers will not learn their trades in British equipment and thus be familiar with it when they later obtain positions of responsibility. 5. Mr Royle is also concerned about the strong feeling in Hong Kong that we in Britain show a lack of concern for the Colony's interests and for her special problems. The Hong Kong complaint is that, in the post war years, we left the Colony to grapple alone without giving them significant financial assistance to tackle the problems of the Chinese immigration; that the British Government has been a party to a number of decisions adverse to the Colony's trading and financial interests, in particular the restriction on Hong Kong cotton textile exports to Britain since 1959, the import surcharge 1964, the increase in the defence contribution in 1966; and we are now negotiating to increase the size of the defence contribution still further.
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CONFIDENTTAI,
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