TNAG-0382-FCO40-428-Sterling-assets-and-balance-of-payments-of-Hong-Kong-1974 — Page 130

CONFIDENTIAL

Ma Jande (23:

in Super

Mr Youd

Sir D Watson

Watso

STERLING GUARANTEE HONG KONG

1.

The attached notes of Mr Barratt's visit to Hong Kong show that both Mr Haddon-Cave and the Governor have put to him, allegedly without the knowledge of the other, the proposition of freedom for Hong Kong to make its own responsible decisions. Mr Barratt reacted favourably and I expect we shall hear more of this. But as Mr Lewty says in his minute, the sort of self- denying restrictions which Mr Barratt has in mind may well cause trouble if, as is almost inevitable, there is pressure in Hong Kong over the next few years to diversify extensively out of sterling. If the Governor comes back for talks with the Prime Minister we should discuss this question with him.

5 December 1973

DOBL

A C Stuart

Hong Kong & Indian Ocean Dept

I store the datter expressed about

the "gentleman's agreement." "But we had better

Mr Hodder. Cave propones before

see what

inject objections. Sir D. Natson has already told Sin M. Machahure (privately) of our fears

on this score.

Jes - let

wart I see

6/12

what ihr Hadda. Cawe put is forward. A

CONFIDENTIAL

are