TNAG-2764-FCO40-3981-UK-Hong-Kong-Scholarship-Scheme-donation-to-the-UK-Governme-1993 — Page 14

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pressures under which the Diplomatic Wing Scholarship programmes are operating. The substance of the proposed

phase-out and intended reallocation of reduced funds for Hong

Kong scholarships is contained in the attached draft letter to

the Hong Kong Government.

5.

The proposed reduction in scholarship resources allocated

to Hong Kong represents a considerable cutback (Hong Kong is

currently top of the list of FCO scholarship fund recipients on £2,240,000 per annum). Under present plans, this will be cut back to £540,000 (it is expected that the exisiting FCOSAS

provision of £1,130,000 per annum for China will continue). However, we feel this is a realistic allocation when seen

against a background of overall cuts and tight budgetary

constraints. The Hong Kong Government suggested that HMG

divert our total savings resulting from the phase-out to

funding improvements in UK/Hong Kong Scholarships. We do not see this as a viable option. Given that the Hong Kong Government are withdrawing completely from the UK/Hong Kong

Joint Funding Scheme, such a high contribution from us would

clearly be disproportionate to our commitments in other areas

of the world. Also, UK/Hong Kong Scholarships are not ideally

targetted from the point of view of the UK's long-term

interests, since they focus mainly on first degree candidates.

Our proposed provision of £0.5 million for new FCOSAS awards could target worthwhile Hong Kong candidates at postgraduate

level and focus on study areas which might be relevant to

future UK interests. The new FCOSAS awards (£0.5 million will

fund about 35 full costs scholarships) would have to be operated by the British Trade Commission in Hong Kong (BTC) in Hong Kong and by the New Consulate General after 1997. Before going firm and telling Hong Kong of this new programme we will have to discuss modalities (staffing and other implications)

with the BTC. In this way we would expect to maintain full

control of this highly valued tool.

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