British forces were withdrawn from the area as a whole by 1976 under
the Defence Review of 1974 which rightly concentrated Britain's
military effort in the NATO area.
Strategically, SE Asia has not lost its importance for Britain, lying
as it does athwart the air and sea routes to Hong Kong on the one hand
and Australia and New Zealand on the other.
The position on Hong Kong is that relations between China and Hong
Kong and between China and Britain are better than could have been
foreseen a few years ago. The Chinese have reassured the people of
Hong Kong and investors there that their interests will be taken care
of in the future and have made clear that they attach importance to a
continuation of Hong Kong's role as an international commercial centre
and free port. An important consideration for them is that Hong Kong
provides one third of China's foreign exchange earnings. The longer
term future of the Territory will need to be discussed with the
Chinese in due course. Our present good relations with China provide
a satisfactory basis for this.
As for Australia and New Zealand, it is difficult to envisage any
diminution of the traditional ties between these countries and Britain
in the future. Commercial and cultural links remain strong and,
however critical of British policy they are at times, there is no
reason to think that the overall community of interest has become
weaker with the years witness the Australian and New Zealand reaction
to the Falklands conflict.
I should also mention one residual interest which is to be reduced
within the next few years, namely Brunei. Under present arrangements,
Brunei is an independent Sultanate in treaty relationship with the
/United
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