CODE 18-77
Mr. O'Keeffe
SECRET
Hong Kong & Indian Ocean Dept.
Reference........
W
copies to:
Mr. Larmour
Mr. Cortazzi
Mr. Foggon (OLA) Mr. Masefield
(Planning)
Mr. Dart (ED)
Mr. A. Smith
HONG KONG:
1.
PLANNING PAP R AND THE ECONOMY
I
I have seen a copy of Mr. Smith's minute of 23 February. have much sympathy with his point of view, having never myself grasped the essentials of Hong Kong's apparently haphazard economic system. I have heard similar comments on the Japanese economy which, to the orthodox British eye, seems perilously ramshackle with even the greatest Corporations head-over-heals in debt to the Banks and the balance between issued capital and borrowings quite out of line with our ideas about how things should be done.
2.
The trouble is, both economies work uncommonly well: and because this is so I suspect that any economic advice we might wish to offer to Hong Kong would get a pretty frosty reception. It seems to me that is is precisely because the colony has such a free-wheeling economy
what the Japanese have called a bicycle economy that it has done so well and continues to do so well. The little I know of the Chinese entrepreneur makes me think that too liberal a dose of financial orthodoxy would act as a weed-killer rather than a fertiliser. If it did we should be in trouble over Hong Kong sooner rather than later.
This is not to say that I contest the need to do what we can to see that the wilder excesses of Hong Kong's exuberant economy are in some degree curbed: but I think we should think hard before trying to impose our economic ideas wholesale on an economy of which the environment is so very different from our own.
3.
23 February 1976
كسل
W. Bentley
Far Eastern Department
SECRET