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5. Sir Murray MacLehose confirmed this and said that the problem was now solely a question of the Police Force and its morale. Over the past years they had necessarily suffered a complete change from what had been a mere gendarmerie maintaining the British presence in the colony, to a highly sophisticated and competent Porco. This change of role could not have been carried out without Dome traumas.
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Dr Owen said that fortunately, apart from "The Guardian", affair had attracted little attention in the British press. went on to say that as far as he could see all was going well in Hong Kong. Various MPs who visited Hong Kong had come back full of praise. The principal complaint was that many of the expatriate civil servants there seemed completely out of touch with British ideas and that the public service perhaps needed an injection of new blood. As far as social development was concerned, Hong Kong was proceeding in the right directions. Our only concern was that perhaps the pace was too slow.
7. Sir Murray MacLehose explained that there had been a 96% increase in six years in real terms of spending in the public sector. Many items of expenditure that would be included in the public sector in Britain were officially private in Hong Kong, e.g. electricity, the underground railway, but tarriffs were directly controlled by the Government and, therefore, in practice could be considered as part of the public sector.
8. Dr Owen asked the Governor when he thought Chinese representation in Hong Kong would be possible, what his strategy was and how we should go about a dialogue with the Chinese on this question.
9. Sir Murray MacLehose replied that relations with the Chinese were probably better than they had ever been before over the Hong Kong question. There was a large number of Chinese officials in Hong Kong, almost certainly more than, for example, the British representation in Washington. In the last few years a system had been evolved whereby the Political Adviser in Hong Kong could and did telephone Chinese officials in the New China News Agency frequently to discuss any matter of common interest and immediacy. He thought that the Chinese were satisfied with the situation. Indeed, before the last Political Adviser had left they had written a letter to him saying how content they were with the situation in Hong Kong. This was a unique signal from the Chinese and must be interpreted as a clear indication that they were content with the status quo.
He believed that we should leave the position of Chinese official representation on one side for the time being. We might wish to use it later. We could make a concession in connection with some clear indication in China of their policy vis-à-vis Hong Kong in relation to the expiry of the leases in 1997 (an indication which the Chinese would probably prefer to be implicit rather than explicit). The Chinese had pushed
Sir Alec Douglas-Home in 1974. Sir Alec had been advised to ignore
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