TNAG-0542-FCO40-637-Strength-of-garrison-in-Hong-Kong-1975 — Page 204

GRS 170

IMMEDIATE

CYPHER/CAT A

SECRET

EM FCO 011540Z

RE

- 4 AUG17/0

SECRET.

PERSONAL.

UK EYES ALPHA.

NXK 10/1

TO IMMEDIATE HONG KONG TELNO 594 OF 1 AUGUST.

PERSONAL FOR GOVERNOR.

MIPT.

(204)

1. IN COMING TO THIS DECISION MINISTERS TOOK THE VIEW THAT, BY ANY OBJECTIVE STANDARD, HONG KONG COULD AFFORD A 75% CONTRIBUTION, WHICH THEY ESTIMATE WOULD AMOUNT TO 1% OF THE COLONY'S GDP. THEY

WERE NOT UNMINDFUL OF THE CURRENT RECESSION IN HONG KONG BUT

NOTED THAT THE PROSPECTS FOR THE HONG KONG ECONOMY THEREAFTER

WERE EXPECTED TO BE MORE FAVOURABLE. MINISTERS ALSO NOTED THE LOW

TAXATION RATES APPLICABLE IN HONG KONG.

2. BOTH THESE TELEGRAMS ARE FOR YOUR OWN INFORMATION ONLY AT THIS

STAGE UNTIL WE HAVE HAD AN OPPORTUNITY TO DISCUSS WITH MR

RODGERS HOW HE PROPOSES TO HANDLE THE TALKS (HE IS ON LEAVE UNTIL MID-AUGUST). HE CONSIDERS THE MATTER TO BE OF SOME URGENCY BUT IN

VIEW OF THE LEAVE SEASON AT BOTH ENDS HE CONSIDER THAT THE FIRST HALF OF OCTOBER (IE AFTER THE LABOUR PARTY CONFERENCE) WOULD BE

SUITABLE: AND THAT, AT ALL EVENTS, AN AGREEMENT SHOULD BE CONCLUDED BEFORE THE VISIT OF THE DEFENCE AND EXTERNAL AFFAIRS SUB-COMMITTEE IN NOVEMBER.

CALLAGHAN

FILES

HKIOD (3)

DEF. D

SWPD

PS

PSI LORD GORONWY-ROBERTS SIR.D. WATSON

MR WILFORD

MR SYKES

MR

MALE

MR THOMSON

MR

COPIES Το

ANDREW, AUSS, MOD MR HANSFORD, TREASURY MR BRYARS CABINET OFFICE MR AGGLESTON, PSA.

STAFF DUTY OFFICER. MOD

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