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CONFIDENTIAL
香港總督府
RECEIVED
REGISTRY N 52
25 MAR 1970
GOVERNMENT HOUSE
HONG KONG
15 March 1975
Sir,
HKKIYS
3
By the end of 1974 the down turn in the
Hong Kong economy and the social pressures generated by
it dominated all other issues here. For this reason
I have delayed this despatch until the outcome of the
Budget for 1975/76 was known.
2.
After the boom years of 1968-73, in 1974
Hong Kong tightened its belt, in 1975 this is being further
tightened and the pinch is hurting. So far the population
has reacted with typical realism and flexibility.
But
the principal problem confronting my government in 1975
will be how to maintain the cohesion, confidence and loyalty
of the population during the period of unfamiliar stringency
which lies ahead.
3.
The problem is all the more difficult to
handle because the impact of world-wide recession, with con-
sequent loss of revenue, has coincided with the first years
of far-reaching plans for social betterment. The latter
are necessary in themselves, and have aroused public
expectation and support, but they have also increased the
Government's demands on the economy.
The problem has been
THE RIGHT HONOURABLE
JAMES CALLAGHAN, M.P.
CONFIDENTIAL
/how to finance