CONFIDENTIAL
S/4
THE HON SIR CON O'NEILL KONG
Foreign and Commonwealth Office Whitehall SW
(Roon 716)
60
12 August 1970
I owe you some account of my visit to Hong Kong last week. A good deal of what I learned is being incorporated in the Board of Trade paper on Hong Kong which we shall be circulating to WGE at the end of this month. But you may like to have a few summary impressions.
2.
The main thing which struck me (apart from such basic features as the stupefying heat, the strength of the drinks handed round by John Cowperthwaite etc) was the freebooting, free enterprise nature of Hong Kong. Income tax at a maximum of 15%, a Chinese population uninterested in democracy but intent on working hard and making as much money as possible, an economy 85-90% of whose production is exported and a generally robust, indeed almost buccaneering attitude towards world trade which we lost probably in the United Kingdom before the end of the nineteenth century.
3. Two points of immediate relevance to our consideration of Hong Kong's problems flow from this. The first is that the kind of question which would occur to those of us in economic departments (eg how will Hong Kong find enough jobs for the rapidly increasing working population on present demographic trends, what annual rate of increase in exports is needed to maintain full employment etc) did not strike the Hong Kong Administration as realistic. This is not because they are intellectually incapable of providing estimates. But their experience in an economy so dependent on the ebb and flow of world trade and on their own efforts has led them to conclude just as our Victorian forefathers did that in this kind of situation forecasting trade flows is largely a waste of time. John Cowperthwaite told me that some time ago an carnest economist came out from the United Kingdom and suggested that Hong Kong needed a National Plan. Cowperthwaito observed sagely that Hong Kong had a number of active and enter- prising planners. Really, said the economist with an air of scornful surprise. How many? Four million of them said Cowperthwaite. Collapse, as Punch would have said, of young party.
CONFIDENTIAL