SECRET
9.
budget of $6,000 m., or a public works programme over the next ten years amounting to about $HK 25,000 m. at 1974 prices. Furthermore the existence of these reserves makes the Government credit-worthy, and with the need for massive borrowing ahead they are an asset not lightly to be thrown away. But in any case with such large spending programmes drawn up for the next ten years, and liable as the Colony is to chronic uncertainty about its trade and thus its revenue, we thought it prudent to harbour these resources until a real need arises. Of course the position would be quite different if the Hong Kong Government could count on massive development aid or soft loans, but this it cannot do. It is compelled to stand on its own feet and must conduct its financial policies accordingly.
22.
The foregoing paragraphs summarise the position of this Colony at this moment. With the assurance of a period of acceptance of the status quo by China, the Hong Kong Government is geared to make a massive effort to use this period to set right an much as it can of the deficiencies in the Colony. Perhaps in our original draft plans we were attempling to do too much too quickly, but in any case we have been slightly and temporarily knocked off-course by the financial uncertainties induced by the oil crisis. But the effort and the programmes stand, and the course has been re-plotted.
23.
The Government is now confronted with social problems brought about by imported inflation and by the uncertainty of export markets affected by the oil crisis. The position will be described in my next despatch.
I am sending a copy of this despatch to
H.M. Ambassador in Peking.
I have the honour to be,
Sir,
Your most obedient, humble servant,
Mi
GOVERNOR
SECRET.