Secretary of State
SECRET
M.O'
PS/nd. Gorgany · Roberts. ALIS
до
HỒNG KONG
14/1
I had a long talk yesterday with the Governor of Hong Kong whom you will be seeing tomorrow. David Ennals was able to stay for the first part. It might be helpful if I set out a few points which arose in the discussion.
General Situation
2.
Sir Murray explained that the recession in Hong Kong (a direct by-product, of course, of the recession in the Colony's principal overseas markets) caused a considerable drop in the numbers employed in industry in the last ? quarters of last year. Many of these had found alternative employment in the service sector, farming etc. The situation has now stabilised somewhat since many industrial employers have been content to keep on workers in the expectation that trading conditions would improve towards the end of this year. The Governor fears however that if conditions do not improve, workers will be laid off in greater numbers causing unemployment with consequent social and economic strains on the Colony. The Government have made contingency plans to absorb 10 - 15,000 workers on public works projects and, if necessary, to provide emergency assistance for able bodied workers who at present are not covered by the Colony's social security arrangements.
3. Against this background, the Governor has had to face the disagreeable prospect of seeing his long-term plans for improvement of its social and educational services rephased, as a result of events outside his control. A commendable amount of momentum is, however, being maintained. Taxation has been increased in the latest budget, and a record sum of HK$3,057 million, representing 41.8% of total expenditure, is earmarked for the social services this year, an increase of 12.4% over the revised estimate for
- 1 - SECRET
/last