Minister

VEVILI

AND I

42

Hong Kong

A few thoughts based on personal experience: as you know I lived with a Chinese family (Lower middle class) for 2 years, but also in a number of ways have had contact with some pretty lowly levels of Hong Kong society.

It seems to me that our policy on Hong Kong as set out in the planning paper has two threads.

(1) A broader base for the Hong Kong Government involving the participation of more strata of Hong Kong society, particularly wage-earners.

(2) Fiscal reform, making possible social and economic reform.

There is a widespread (though not universal) assumption here that, because at present the Hong Kong Government is dominated by the big capitalists, (1) will make (2) easier to put across to the Hong Kong Government. This is at best a dangerous assumption: I think it is wrong.

The observable fact is that there is very little pressure in Hong Kong from any quarter for either constitutional or economic reform, excepting a very small group of expatriots who do not really have any influence on indigenous opinion at all. I am not sure why this should be so: given the poverty one would expect the opposite. I think it is something to d with the individualism of even the most humble Chinese urban dweller: everyone thinks that if his "luck" is right, he may one day be a millionaire. Perhaps because he has never been led to expect it, he does

SECRET MID PERCOMAL

/not demand

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