CONFIDENTIAL

GUIDELINES FOR THE GOVERNOR DESIGNATE OF HONG KONG: PAPER B

Domestic Policies

General

1. First and foremost the economy of the Colony must be

maintained. This means on the one hand securing adequate

export outlets, and on the other taking whatever steps are

necessary to assure investment, flexibility of production and

a management cadre and labour force with the necessary

expertise. There has been no real difficulty in obtaining

these conditions in the circumstances of expanding world

trade which have existed since the war, but it is uncertain

whether they will now continue. This uncertainty coincides

with a time at which the Hong Kong Government is facing

decisions on the biggest expenditures in its history on

such items as mass transit, desalinisation, urban renewal

and secondary and technical education, that will commit

resources well into the 1980s. Something of an act of

faith may be necessary and in this connection the

considerations in Paper A on long term planning are

highly relevant.

J

2. On the domestic front broadly speaking since the war

the Hong Kong Government has been immersed in a series of

vast emergency programmes resulting from the need first

to rebuild the Colony, and secondly to cope with problems

resulting from the quadrupling of the population in 20 years.

Great as has been the Government's success, I expect to find

/ that

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