TNAG-0380-FCO40-426-Sterling-assets-and-balance-of-payments-of-Hong-Kong-1973 — Page 28

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Hong Kong's intelligent policy of cultivating such people had

paid dividends and there were now many people in the Government,

the House of Commons and Whitehall who could be counted as

friends of Hong Kong.

STERLING

3. Mr Woo said that, in their sterling guarantee, they needed

It was not sufficient to be able to

more room for manoeuvre.

diversify out of sterling only 11% of their reserves. Ideally

they would like the figure to be 50%. In addition, it would be

much better if the guarantee could be expressed in Hong Kong

dollars, rather than US dollars, but he feared that this might

cause the Treasury difficulty. Mr Royle agreed that this might

be difficult for the Treasury. However, the Governor was at

present discussing the whole issue with the Treasury, and

The present

Mr Haddon-Cave would be able to have talks with the Chancellor

and his officials in Nairobi and Dar-es-Salaam.

arrangement was of course an extension of the existing agreement.

He realised that the agreement between Hong Kong and their banks

was a separate issue. He was well aware of Hong Kong's anxieties,

especially over MSP. The Governor and Financial Secretary had been

doing an excellent job in keeping us informed. Within the

inevitable constraints upon us, we would certainly do our best to

help the colony. Mr Woo agreed that it would be best to await the

outcome of the talks between the Governor and the Treasury, and

But members of ExCo and LegCo

those in Nairobi and Dar-es-Salaam.

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/were