CONFIDENTIAL
FOREIGN AND COMMONWEALTH OFFICE
HKK 014/3
DIPLOMATIC REPORT No. 167/76
FCO (S) WHI (S) Distribution
HONG KONG 23 January, 1976
HONG KONG: ANNUAL REVIEW FOR 1975
The Governor of Hong Kong to the
Secretary of State for Foreign and Commonwealth Affairs
SUMMARY
Hong Kong came through the recession, but it was a most anxious time (paragraph 2).
2. Measures to strengthen the community of Hong Kong; they helped Hong Kong to weather the recession (paragraph 3).
3. The fight against crime is showing some signs of success, and the rapid rise in the crime rate over the last eight years was halted (paragraphs 4-5).
4. Throughout the year the attitude of Peking was friendly and helpful. The new relationship evolved between Hong Kong officials and Communist Chinese officials. The Royal Visit set the seal on the status quo. The position now reached, though full of oddities, should only be changed gradually and unobtrusively, if at all (paragraphs 6–8).
5. Relationship between Hong Kong and UK-the minor irritants have been Defence Costs, industrial competition, corruption and lack of information in the UK about the Hong Kong scene. How these issues have been tackled in the past year (paragraphs 9-14).
6. Misconception that the Colony represents a loss to the UK. When invisibles are included the balance is already in the UK's favour, and it could be increased (paragraph 15).
7. The recession in Hong Kong was sharp and deep and in March 10 per cent of the work force was probably unemployed. Recovery has been fast in the last quarter, unemployment has dropped and incomes are rising. The current mood is one of confidence, though the future depends on the recovery of markets in America and Europe (paragraphs 16-18).
8. In spite of the recession, resources were found to maintain progress in the major social programmes, but some rephasing was necessary. We hope to pick up speed again in 1976 and be back on course by 1977 (paragraphs 19–20).
20933-167 165905-17
CONFIDENTIAL
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