TNAG-0329-FCO40-365-Briefs-for-UK-officials--visits-to-Hong-Kong-1972 — Page 31

CONFIDENTIAL

Brief No 4

SIR LESLIE MONSON'S VISIT TO HONG KONG

APRIL 1972

HONG KONG'S STERLING ASSETS

1.

1.

At the end of 1971, Hong Kong's sterling assets stood

at £770 million - an increase of £88 million since September

1971.

2.

In his budget speech on 1 March, the Financial Secretary

said that "Hong Kong had to give thanks to the gilt edged

market and the careful management of the Colony's portfolio

by the Crown Agents in London and the Accountant General,

*

1

acting within the broad guidelines laid down by the Exchange

Fund Advisory Committee" for the increase of HK$1023 million

!

in the Colony's reserves over the last year.

Despite this

however some Unofficial Members of the Legislative Council

·

in subsequent debate urged that part of Hong Kong's reserves

should be diversified away from London.

diversi

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}

Mr Q W Lee had much

to say on the matter and Mr Salmon suggested that "diversifi-

cation of the Colony's reserves would give Hong Kong a bargain-

ing position on economic issues elsewhere". Extracts from

their speeches are attached.

3. In his speech winding up the debate the Financial Secre-

tary referred to Mr Lee's "thoughtful and timely speech" and

桌

said that "As I hope to be holding discussions in Lond on

shortly on the management and security and future of our ster-

ling assets, I would prefer to say no more at this stage

1

except that I have taken careful note, of the various points

made".

4. In his letter to Mr Marshall Mr Haddon-Cave said that he

wished to discuss

"(a)

with the Bank of England and the Crown Agents

CONFIDENTIAL

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