TNAG-0377-FCO40-423-Defence-and-Oversea-Policy-Committee-review-of-UK-relations--1973 — Page 51

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Mr Stuart HKIOD

CONFIDENTIAL

Reference HKK 3/578/12 (

DOP PAPER ON BILATERAL RELATIONS WITH HONG KONG

Thank you for giving FRD an opportunity of commenting. I do not disagree with anything you say in the paper, but I wonder whether one or two points you make might not be put somewhat differently. I am thinking of course of Treasury reactions. the paper stands, we might be needling the Treasury unnecessarily.

(i)

HKK3/548/15-

(11)

viz:-

the second sentence of paragraph 2.

It may seem to some a little bald to speak of Hong Kong's "needs" without recognising that the UK has needs of its own, which of course cre far more important. Could we reword as follows:-

"The Treasury has been able to adapt the unilateral declaration offering a guarantee

As

to certain sterling holders in such a way that Hong Kong should now be able to participate in the arrangement".

I wonder whether we are not over-doing the apologia in the second half of paragraph 4. Other Whitehall Departments rightly or wrongly may think that we should be firmer in getting the Hong Kong authorities to put over our point of view. I suggest we do not want to expose too much surface here. Perhaps we could drop the sentence "This is not easy for British officials...."

(iii) Paragraph 5. Do we really need to say "Even

at some cost to our own direct interests"? Of course this may be true in other areas which are no concern of mine; but so far as the sterling issue goes our own direct interests are naturally paramount and I think it would be wrong to

suggest even indirectly that the Secretary of State does not recognise this.

SM. Samhitze

SJG CAMBRIDGE Financial Relations Department

19 November 1973

CONFIDENTIAL

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