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is believed to have left the Colony. July and provisional August figures show a pronounced decrease in the rate of withdrawal and even some signs that funds are returning to the Banks. There has been some reduction in the inflow of capital from abroad especially from the
South East Asia.
15. The principal threat to the Colony at present appears to be the risk of long-term economic stagnation caused by reluctance to invest while conditions remain unsettled. But there have been recent signs of a modification in the attitude of the Communist Peoples Government towards Hong Kong in economic matters. There is evidence that C.P.G. banking authorities are now willing to transact business with banks outside their
own group and are seeking to re-establish old contacts in both the banking
and commercial worlds.
16. A list is attached of Ministerial statements made in Parliament on
the subject of Communist confrontation in Hong Kong.
Hong Kong Department,
October, 1967.
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