TNAG-0381-FCO40-427-Sterling-assets-and-balance-of-payments-of-Hong-Kong-1973 — Page 95

you would be under heavy local pressure to get out

of sterling, and we would equally be under pressure

to tell you not to do so. A formal agreement,

with all the strains of negotiation and maintenance,

would be better than a constitutional row. The dog

of "Hong Kong must do what it is told because it is

a dependency" is sleeping in Whitehall because we

take care to keep it so. But, as you well know, it

is by no means dead. Moreover, given that we want

to strengthen on both sides the realisation of the

interdependence of Hong Kong and Britain, it would

look odd, to put it no higher, if all the

independent holders of sterling chose to come

under the umbrella of an agreement, and Hong Kong

did not.

However, we can leave this philosophising until we

see the shape of what is on offer after March next

year.

SECRET

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