TNAG-0379-FCO40-425-Sterling-assets-and-balance-of-payments-of-Hong-Kong-1973 — Page 136

Mr Wilford

SECRET

Me STUART

43B

HONG KONG AND THE STERLING AGREEMENTS

Mr Stuart's minute to you of 5 July.

2. I agree with what Mr Stuart has to say about the need for consultations with Hong Kong about the future, if any, of the Sterling Agreements. There are, I think, two issues here. One is general: it is part of FCO purpose to seek to ensure that there is something which could meaningfully be regarded as consultations with Agreement signatories. The second is specific: it is our concern to seek to ensure that the special problems of Hong Kong are recognised. Whatever decision may be taken about the Agreements in general, it may be that Hong Kong and perhaps some others have to be regarded as special cases and treated accordingly.

3. We have suggested that the Secretary of State might make these points, inter alia, in Ministerial correspondence. This, together with repeated prodding and pushing at official level, should I think suffice at any rate for the time being to ensure that the Hong Kong problem is not lost from sight. The Bank of England is I think on our side; and there are even those in the Treasury who are disposed to be sympathetic.

4.

It is, however, much easier to recognise that there may be a special problem than it is to devise possible ways of resolving it. This is not just because of differences between what Hong Kong may want and what we may be prepared to entertain. There is also, I suspect, a difference between what Hong Kong may want and what may be in the interests of Hong Kong.

12 July 1973

cc Mr Marshall Mr Stuart ✓

SECRET

D G Holland