TNAG-0334-FCO40-370-Visits-of-Secretary-of-State-for-Foreign-and-Commonwealth-Af-1972 — Page 175

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deficit financing.

The Government has very large

commitments towards such future projects as the

development of the public assistance scheme, the

expansion of secondary and technical education,

housing for squatters and others, the extension

of Kai Tak Airport, desalination plants and

reservoirs to help meet the growing needs for

water: and possibly a mass transit system (details

at Annex A);

4.

Moreover Hong kong's economy is very largely

dependent on its trade with the outside world.

It is accordingly particularly vulnerable to

outside influences, whether from political scares

or from a closing up of markets; and the indications

are that Hong Kong will find it difficult in

future to maintain the rate of growth it has

achieved in recent years.

5. In view of the buoyant state of the Hong Kong

economy (and the unhealthy state earlier of the

UK balance of payments) it has been difficult

for HMG to help Hong Kong financially with its

development problems. The calls for financial

assistance from HMG are such that they can only

be met on a system of priorities based on need.

However, the Unofficial Members of the Executive

Coulcil have been informed (during the negotiations

over the defence contribution) that it must not

be thought that HMG would not be prepared to

consider assisting Hong Kong in some appropriate

way if an urgent need for such assistance were

to arise at some future time and a specific case

2.

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