TNAG-0380-FCO40-426-Sterling-assets-and-balance-of-payments-of-Hong-Kong-1973 — Page 219

SiR ERIC NORRIS-RECC.

NOTE OF A MEETING BETWEEN THE GOVERNOR OF HONG KONG AND THE

MINISTER OF STATE ON 9 AUGUST

Present:

Minister of State

Sir Murray Maclehose

Mr P Haddon-Cave

Mr Mitchell

Mrs Hedley-Miller

Sir Eric Norris

Miss Diana Seammen

HONG KONG STERLING AGREEMENTS

Sir Murray Maclehose said that he was grateful to the Minister

of State for seeing him and Mr Haddon-Cave. The Hong Kong Government were anxious to act responsibly but they were very conscious that their very large sterling holdings could be

uncovered after September 24th. They realised their obligations both to Her Majesty's Government and to their own people and had

no wish to disrupt the sterling or the gilt-edged market. They were anxious to have clarification of the likely course of events after September 24th. The Chancellor's message had not excluded the possibility of a new guarantee and if there were to be such a guarantee there were only 6 weeks in which to agree its terms. On the other hand, if there were to be no further guarantee, the Hong Kong Government would need to take immediate advice on their

own future course of action. The last possibility was that there

would be no further guarantee but there would continue to be some constraint on the Hong Kong Government's freedom of action and again if this were to be the case, immediate negotiations were

necessary.