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Defence Costs Agreement
7.
Both teams working to secure an agreement that is fair to
both sides and meets needs of both governments. Two full rounds so far, supplemented by informal discussions. Making progress.
(Details? Likely outcome?)
8.
As you know, talks now in progress between MOD and Hong Kong Government. You would not expect me to speculate on outcome.
(Why must Hong Kong pay for the garrison?
Joint Declaration says
that after 1997 China will not ask SAR to pay.)
9.
We believe it is appropriate to ask Hong Kong people to
contribute to costs of their defence. HMG also pay a share. Bear in mind that logistical problems involved in maintaining garrison 8000 miles from its home base in the UK very different than those
that would be faced by the Chinese after 1997.
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