TNAG-2240-FCO40-3219-Future-of-Hong-Kong-Royal-Navy-presence-1991 — Page 128

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Mr Goulden

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Mr Smith, NPOO

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PRIME MINISTER

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1.

Future RN Presence in Hong Kong

My minute of 15 July crossed with Tom King's of

the same date.

2.

You will recall that the Governor raised with you the problem of the funding of the Royal Naval presence in Hong Kong after 1992. Unless we can resolve this now, we shall have to announce very soon that the three vessels will have to be withdrawn. In his minute, the Defence Secretary sets a deadline of 23 July, when

Malcolm Caithness will be in Hong Kong. Furthermore an announcement of withdrawal before your own visit to Hong Kong would be unfortunate.

3.

The patrol craft perform an important military and political function. They are a deterrent against Chinese incursions into Hong Kong waters - which have become more frequent in the last couple of years. Politically, they are a symbol of British commitment to the territory, at a time when this is being called increasingly into doubt. Their withdrawal would send the wrong signals, both locally and to the Chinese.

4.

The cost of retaining the three craft over five years from 1992 would be some £40 million, of which our share would be £15 million (ie 35%). In view of the

CONFIDENTIAL

/MOD's