TNAG-0543-FCO40-638-Strength-of-garrison-in-Hong-Kong-1975 — Page 104

7/2

= her

tean 50%.

30/34 = trachon

SECRET UK EYES A

taxation, but at the same time reaping maximum economic

benefits from the garrison.

9.

As regards the size of Hong Kong's contribution

the Governor has persistently taken the line that the

colony cannot be expected initially to do more than

double its present contribution to about £17M a year,

although he has not ruled out the possibility of a

graduated contribution rising to a higher figure in later

years. He has pointed out that Hong Kong is less interested

in percentages than in the provision to be made for defence

in Estimates 1976/77. The Hong Kong representatives are

likely to say that, while they accept that some increase

in the colony's contribution is justified, it is quite

unrealistic for HMG, which was equally a partner to the

existing agreement, to expect Hong Kong to raise its

trachón contribution from £84 to £30M in a single step.

75%.

K

They

will probably point out that the economy of Hong Kong is

now less buoyant than in the recent past and that a major

increase in defence expenditure could only be met at the

expense of planned social programmes or by increased

taxes which would discourage the commercial activity on

which the colony's economy depends.

They will not fail

They

to make the point that, with the proposed reduction in the

garrison, they are being asked to pay more for less.

may also argue that HMG, which has a constitutional

responsibility for the integrity of the colony and

derives economic benefit from it, should be prepared to

pay the greater part of the defence costs and remind us

that Hong Kong is the only dependent territory which we

expect to contribute to its own defence.

SECRET UK BYES A