TNAG-0380-FCO40-426-Sterling-assets-and-balance-of-payments-of-Hong-Kong-1973 — Page 11

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1. In Mr Guest's minute of September he asks if we would consider a draft public statement by Mr Royle to meet the Senior Trade Commissioner's suggestion that a PR post is urgently required to restore Britain's image in Hong Kong.

2.

I discussed this idea with Sir Murray MacLehose before he left. The difficulty is that whatever happens in Hong Kong we must not give the appearance of an argument with the Hong Kong Government. This is Mr Aston's dilemma. We therefore cannot say although it is true, that, for example, our offer on sterling is not ungenerous, that Hong Kong would be wise to accept it, and that their difficulties are at least partly their own fault anyway.

3.

The alternative would be a warm but somewhat vague expression of goodwill. Sir Murray thinks there could be advantage in this but he has rightly pointed out that it is not likely to have a substantial effect in Hong Kong unless it deals with at least some of the current specific points of conflict.

4. In the light of this advice I think the right peg on which to hang a general message is likely to be Hong Kong's agreement to the new offer on sterling. I take this agreement to be probable, since it is in fact in Hong Kong's interest, unless things go seriously wrong in the talks which the Treasury have undertaken to have with Mr Haddon-Cave in Dar-es-Salaam. Moreover, if they do go wrong and there is a public row, it would not be a good moment to make anodyne noises of friendship.

5. If Mr Royle agrees therefore, I suggest we should wait a little before drafting a message. This cannot take long as the old Sterling Agreement expires on 24 September.

20 September 1973

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