SECRET
FOREIGN AND COMMONWEALTH OFFICE
HKK 13/2
DIPLOMATIC REPORT No. 289/74
Secret Distribution
HONG KONG
27 May, 1974
HONG KONG OBJECTIVES
The Governor of Hong Kong to the
Secretary of State for Foreign and Commonwealth Affairs
SUMMARY
The first of three despatches* on the current situation in Hong Kong. (Paragraphs 1-2.)
2. The unusual circumstances of Hong Kong make normal progress towards independence impossible. In this situation the objectives of the Government are the well being of the population, good relations with China and minimum demands on Her Majesty's Government. (Paragraph 3.)
3. The status quo in Hong Kong is in the interests of the Chinese Government. Changes may come, but the Chinese timescale is long. Hong Kong has decided how to use the time available. (Paragraphs 4-9.)
4. Hong Kong should be established as a model city. Success could favourably influence the attitude of the Chinese Government. (Paragraph 10.)
5. Social problems should be faced now. Need to make rapid progress during 1970s, though costs will be high. (Paragraphs 11-14.)
6. Two other matters of great importance which require urgent attention--the expansion and training of the Hong Kong Police Force to combat rising crime, and the improvement of public transport. (Paragraphs 15-17.)
7. Grass-roots communications between Government and public are being improved, and the machinery of the Administration strengthened. (Paragraph 18.)
8. The Governor originally hoped to pay for this expansion in services with constant tax rates, but the restriction of growth, rising costs and the uncertainty of world markets, demand some rephasing and some additional resources. These can be found from higher taxes, from borrowing or from the use of reserves. The Hong Kong Government have decided to rely primarily on some tax increases and some external borrowing, particularly from the Asian Development Bank. (Paragraphs 19-21.)
9. The original plans may have attempted to do too much too quickly. But the effort and the programmes stand, and the course has been replotted. (Paragraph 22.)
* The second despatch is being printed in the Departmental Series. The third is not being printed.
20905-289 151645-9
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