are now negotiating to increase the size of the defence
contribution still further. In 1969 we imposed a tariff on
textile imports from the Colony and further damage is anticipated
in the context of our application to join the European Economic
Community. In all these circumstances I have been pressed to
make available from the Aid Programme grants of up to £400,000
over the next four years to pay for British equipment in the
projected technical institutes.
6. We cannot tell whether Hong Kong will be able to maintain
its remarkable record of economic growth; if there were to be
at some stage a serious recession in the Colony a new position
might arise. In the meanwhile it is I think agreed that there
is no case for aid on financial grounds since Hong Kong has
already very large financial reserves which are still being
augmented even after meeting the costs of her development programme,
7.
In these circumstances the trade promotion case is a
difficult one for the ODA. I am of course prepared to take
account of British commercial interests in working out the aid
programme but I would not expect to institute an aid programme
simply on trade grounds in a case where development had reached a
level and was proceeding at a pace which did not justify the
transfer of resources. This principle is as applicable to
colonies as to other countries. In such a case I would normally
expect the Department of Trade and Industry in concert with the
British exporters concerned to look after our export interest,
and if it thought it desirable on grounds of future bueiness
opportunities, to provide a fund from commercial sources as was
done in the somewhat similar case of the Indian Institute of
Technology some years ago. I would not in the last resort rule
out a contribution from the aid programme to such a fund but I
would much prefer to avoid it. British commerce is of course
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