CONFIDENTIAL

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香港總督府

HK

NICK 13/690

"GOVERNMENT HOUSE

HONG KONG

with @

ANNUAL DESPATCH FOR 1972: HONG KONG

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The Tunnel and the underground railway symbols of the new Hong Kong.

Hong Kong has come satisfactorily through a year that was difficult for trade and finance; but the problem of the sterling balances remains.

The population of Hong Kong has not been daunted by China's notable international success in 1972: the reasons.

The population is principally interested in short term things connected with its own economic and social betterment. It is consequently expectant of government - which gives the government an opportunity.

Announcement of long term plans for sweeping advances in the fields of housing, education and social welfare, and their effect on the population. The need to retain the interest of the population while these plans develop.

The "Keep Hong Kong Clean" campaign: a

considerable success, which stirred civic pride.

Increase in crime, on the other hand, has the population badly worried.

Visits of the Secretary of State, Mr. Royle and Princess Alexandra.

The need to fix the interest of the population by responding to legitimate demands and encouraging corporate effort.

The effect on Hong Kong of inability to see far into the future.

The logic of negotiating later rather than sooner about the Colony's future, and the need to spend the time available on setting the Colony's house in order.

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