CONFIDENTIAL
as a possible future Governor.
The Governor now believes that a
move would be in the interests of Hong Kong. He is, however, most anxious that no word of this should get back to Mr Haddon- Cave.
14.
If Mr Haddon-Cave were to move we would have to consider who should replace him as Financial Secretary. I think the most efficient solution, which would yet retain confidence in Hong Kong, would be Mr Jordan with a top grade economic adviser from outside. Mr Haddon-Cave would, however, have to be seen to have moved on to higher things.
22 July 1974
сс
Mr Wilford
DOES
A C Stuart
Hong Kong & Indian Ocean Dept.
1. This is a valuable and thoughtful minute. My comments are necessarily diffident, lacking personal knowledge of the position in the territory on the ground and the dramatis personae other than the Governor.
2. I find it difficult to assess the financial situation, on the evidence given, in the black terms that Mr Haddon-Cave uses. No doubt a major factor in the political viability of Hong Kong is maintenance of confidence in its high-geared economy; nevertheless, for a four million strong population, the reserves are not bad and the notion that the note issue should be covered as to 100% by the Exchange Fund sounds Victorian by any standards.
3. The immigration issue - both from China and elsewhere. is going to be a perennial problem. The difficulties of handling it will vary, no doubt, according to the pressures of public opinion in this country which command a hearing with Her Majesty's Government. But essentially, I believe, the views
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