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Mr Cortazzi
BRITAIN AND HONG KONG
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Mr
Mr O'Keefe.
the
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I should like to discuss with Mr O'Keefe before I see
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Sir M. Machedore
Thank you for your minute of 19 December about your visit to Hong Kong which we discussed to-day.
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2. Having only recently taken over and not yet having visited Hong Kong, I am somewhat diffident about expressing views without direct experience. Nevertheless, it is obvious even to a newcomer that relations between Hong Kong and the UK Government are far from being what they should. The trouble is that there is very little identity of interest. I understand from the Department that you have asked them to consider with Mr Scrivener's departments whether a special information effort could be mounted to explain the British Government's attitudes in Hong Kong. This is certainly worth doing but I am not very optimistic that it will be successful. The fact of the matter seems to me to be that Hong Kong at all levels, both Government and unofficial, regard themselves as a success, while they regard us in the UK as a failure. The reason is, as you say in your para 5, that Hong Kong is the extreme example of an ultra capitalist society and they do not want to hear about any other kind of society.
3. It must be admitted that Hong Kong, viewed from some angles,, is certainly a success story. But it is the same kind of success story with which we are familiar in 19th century England and for the same reasons.
4. There is a high level of investment; there are very low rates of taxation, both personal and corporate, and above all there is a supply of cheap and usually docile labour; and given until recently very little expenditure on defence and the social services it is hardly surprising that Hong Kong, in spite of the recent recession, has boomed.
5. You raise in your para 7 the major question of whether or not we should regard Hong Kong as just another of our colonies and as a place where we should enforce higher standards of social welfare. You asked a number of questions but you could ask many others, the position of the trade unions, labour relations generally and in relation to the ILO, the undemocratic nature of the Government and in particular the restricted social background of those who are appointed to the Legislative Council. The Governor, whom I met for the first time during his Governorship a few weeks ago, feels that he has done a great deal during his term of office to improve social conditions in Hong Kong. Certainly he has achieved much, particularly in the field of housing. But quite
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