TNAG-0381-FCO40-427-Sterling-assets-and-balance-of-payments-of-Hong-Kong-1973 — Page 93

SECRET

depth of the Treasury belief that in the last resort Hong

Kong is bound to do what we tell them. An agreed arrangement

is a valuable safeguard against constitutional pressure.

Moreover, if, as he says, Hong Kong would act responsibly and

not get out of sterling when it was under pressure, then a

guarantee could be a valuable safeguard by cushioning Hong

Kong against losses. It would not be responsible to throw

this safeguard away wantonly.

30 October 1973

SECRET

Aest

A C Stuart

Hong Kong & Indian Ocean Department