8.
CONFIDENTIAL
To sum up, while I see danger or little merit in most of the panaceas proposed above, I would not exclude use of the reserves for one purpose or another if real need arose, that is to say if we were heading for crisis conditions. But at this time conditions in Hong Kong are not critical, do not bear out alarmist reports, and do not justify anything of the sort; nevertheless they do justify a very close watch being kept on the economy and its social impact month by month, to give an assurance of adequate warning if social conditions show signs of serious deterioration. I assure you that if such a warning appears we will not hesitate to act, but meanwhile it would be quite wrong and most damaging to rush into panic measures prematurely.
9.
I am sending a copy of this despatch to H M Ambassador in Peking.
I have etc
Murray MacLehose
5
CONFIDENTIAL