Dd. 32855 Ed (4200)
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CONFIDENT IAL
years to take in the interest of our own
jes
economic position and policy, measures which
have affected for the worst Hong Kong's
interests or have been considered generally
in the Colony to affect those interests for
the worse.
The most striking, of course, was
of some: 50 million in the devaluation which meant a loss to the Colony purchasing power of the Colony's sterling assets.
of £
But there have been others decision to switch in 1972 la a
such as our adoption of /tariff rather than
importa
quantitative restrictions of imports as the
protection of our cotton industry, which have
been regarded in Hong Kong as damaging to the
Colony and on which it is widely felt that we
have not given due and proper opportunity to
Hong Kong to make her case. Now that Hong
Kong has transformed itself into a centre of
manufacturing industry and in consequence has
become a competitor of the United Kingdon
industry, both in our domestic market and
abroad, we must expect to be faced with similar
clashes of interest in the future. But the
impression,which has become widespread in Hong
>
f
Kong as a result is that Britain is disinterest-
ed in the territory. This in turn leads to a
fall in confidence, which, as you will know,
is the dynamism which keeps the Colony going.
This lack of confidence and disillusionment
with Britain plays straight into the hands of
China and of the local Communists by giving
them an opening to further their main aim
CONFIDENTIAL
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