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to remedy this unsatisfactory situation. Such an opportunity might occur at any time and it should be recognised and seized, but the sort of assistance and support that Hong Kong might be in need of is as follows:-
(1)
Financial backing for the proposed undergrounā railway. When guarantees were required from E.C.G.D. for the Cross Harbour Tunnel, they were not forthcoming until right at the last minute when it appeared likely that finance would come from France.
Whilst on the subject of finance, it should be remembered that the Hong Kong Government and Banks have reserves of several hundreds of millions of pounds invested in London which they cannot remove and place in other currencies. These are useful funds to the London money markets and, whilst Hong Kong is protected to some extent against devaluation by the Basle Agreement, the Banks have to pay for this protection. These funds are not, of course, freely available for current expenditure, as is sometimes supposed, because they are in large measure backing for the Hong Kong currency, and they have been built up by the hard work and skill of Hong Kong's people unlike, say, India's and Egypt's post-war balances which were war-time defence payments.
(2) In 1973, when the U.K. is in the Common Market,
there will be talks on the harmonisation of textile quotas and Hong Kong will be expecting strong support from the British Government to ensure it is not discriminated against and that its textile industry, on which its economy is heavily dependent although it is trying to diversify, is not cut back by a reduction in its European market. Hong Kong will expect fair treatment from the E.E.C., also under the UNCTAD Generalised Preference Scheme since it has not been accorded Associate status. With regard to the value of this scheme to Hong Kong and other developing countries, you may be interested to read the attached extract from a letter from one of the leading German Department Stores.
There are now Junt ovog four million people living in Hong Kong, 98% of them Chinoue, and, whilst they are earning a reasonable living, the People's
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