TNAG-0457-FCO40-522-Future-of-financial-and-economic-policy-of-Hong-Kong-1974 — Page 13

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CONFIDENTIAL

Sir D Watson wgc.son

PS/Lord Goronwy-Roberts

Mr. Shant

THE FINANCIAL PROBLEMS OF HONG KONG

1.

RECEIVED IN REGISTRY No. 51 30 SEP 1974

HKK

5/+3.

Lord Goronwy-Roberts may be interested to read the attached copy of an article in the Far Eastern Economic Review. This sets out quite well the present financial problems of the Government of Hong Kong and the limitations on the Financial Secretary's power to take action to put things right in the short run.

2.

I have discussed the article with Mr Haddon-Cave personally. He accepts that it is generally a fair statement of his dilemma, though he rejects the conclusion in the last sentence of the article that he had been over-optimistic in the past.

3.

We are discussing in London the questions of the Defence Review and of speeding up social development in Hong Kong. Both of these could involve asking the Hong Kong Government to find substantial amounts of new money. The article explains why this will be difficult to achieve and very difficult to negotiate.

19 September 1974

cc (with encs.)

Mr Holland

Mr Wilford

Mr Male o.r.

Dest

A C Stuart

Hong Kong & Indian Ocean Dept.

This is a very far & Palanced analysis.

The Walia

23/9

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Goronwy Roberts

CONFIDENTIAL