TNAG-0425-FCO40-471-Construction-of-an-underground-railway-system-in-Hong-Kong-1973 — Page 117

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IS ANY CUIDE, THE YEN'S EXCHANGE RATE OVER THE PERIOD OF YEARS

COVERED BY THE CONTRACT MIGHT VERY WELL HARDEN.

SECONDLY, I AM SURE YOU WLL HAVE RECOGNISED THAT IF THE HONG KONG GOVERNMENT WERE TO GIVE A GUARANTEE OF REPAYMENT AS THE JAPANESE

RID ANTICIPATES THE UK GOVERNMENT WOULD BE OBLIGED PUBLICLY TO

STATE THAT THE UK GOVERNMENT'S CREDIT WAS NOT THEREBY COMMITTED.

REACTIONS TO SUCH A DECLARATION IN HONG KONG ARE FOR YOU BUT I

FEAR THAT IN THE UK THERE COULD WELL BE A HOSTILE REACTION BOTH IN

PARLIAMENT AND THE PRESS IF IT BECAME KNOWN THAT THE HONG KONG

GOVERNMENT'S CONCESSION ON THE QUESTION OF THE GUARANTEE HAD

ENABLED THE JAPANESE TO WIN THE CONTRACT. I AM SURE I CAN RELY ON

YOU TO SEE TO IT THAT THESE POINTS ARE GIVEN THEIR FULL WEIGHT WHEN

THE KONG KONG GOVERNMENT DECIDES HOW THE BID ARE TO BE HANDLED,

ENDS.

DOUGLAS-HOME

S

FILES HD/HKIOD PS/MR ROYLE SIR D WATSON MR YOUDE

COPIES TO

MR D N ROYCE DT I

PS TO SECRETARY OF STATE

FOR TRADE AND INDUSTRY

2.

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