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CONFIDENTIAL
Governments of the need for a garrison capable of maintaining the security and integrity of Hong Kong and demonstrating HMG's continuing responsibility for the Colony. The security needs of Hong Kong in present circumstances, and the forces required to meet them had already been the subject of thorough joint study with the Hong Kong Government and agreement was reached in the negotiations that further savings were possible. The garrison will therefore be further reduced, by the withdrawal of an infantry battalion, the artillery battery and the frigate, leaving the agreed minimum garrison of 4 infantry battalions (3 of them Gurkha battalions), an engineer squadron, 5 naval patrol craft and an RAF Wessex helicopter squadron. The total cost of this reduced garrison at September 1975 prices is estimated to be about €42 million a year.
11.
The way in which the costs of the reduced garrison are to be shared between the two Governments after March 1976 was a major topic for discussion during the Minister of State's visit to Hong Kong. He explained the reasons why HMG believed that Hong Kong must in
The future bear a larger proportion of the cost of the garrison. Hong Kong Government for its part accepted that in a future agreement it would have to contribute a substantially higher proportion than in the past, but emphasised that present economic circumstances and planned social programmes placed limits on the amount which could be provided for defence. Further consideration is being given to this question, as well as to the possible release of further land occupied by the garrison but owned by Hong Kong, and to methods of calculating costs, exchange rates and the handling of inflation in a new agreement. It is hoped that early resolution of these issues will permit a fuller announcement to be made before the end of the year.
MINISTRY OF DEFENCE
NOVEMBER 1975
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