2 -

and terrori BIN.

Cur expectation and hope is

that more reasonable and civilisod canons of

bohaviour will from now on provall and that

people, in the words of the Foreign Coorstary,

"may settle down again to thei: normal pursuits,

which is what the vast majority of them want",

indicating that industrial output has not been affected.

2

(*) Doss the Minister see any serious fallin off

of investment in lleng Kong due to vieta and

civil disturbance”.

Clearly events of the nature that have been

occurring in Hong Kong are bound to have some effect

on the economy. Initially thero was, quite

naturally, aose nervousness among businessmen,

tourists, those who had money in the banks, It

does not take much to make "hot" money move, as we

know in London. Withdrawal of deposits from the

banks was at a fairly high rate in May and Juno

but by August had almost ceased and since then

there have been clear indications that money is

flowing back into the banks.

I think that if we tum to the trade figures

over these months we get a very fair reflection of

the state of economy. Exporta have continued to

rise month after month by 16% – 17% over last year

performance, The import figures have admittedly

dipped, but this has been very largely due to the

fall in deliveries from China, particularly of

foodstuffs

Trade with China has boon affected by

Fransport internal difficulties in that country and by claim's The local communists that the port was paralysed deliberate, somewhat half-hearted and unsuccessful.

by strikes.

attempts to restrict China's trade with Hong Kong as

part of a campaign to represent å± as a strike-bound

port paralyood by rietse-

/All the

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