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New Governor and Other Appointments
9.
Naturally speculation about the next Governor is continuous and
growing. Uncertainty complicates relations with the UK. The problem is
not so much a matter of personalities as the need for reassurance that
in chosing the Governor it will be clear that Hong Kong interests will
be paramount and that they will not simply be sent somebody as a matter
of convenience to the British Government. When this was put to me,
I maintained strongly that the needs of Hong Kong would be the basis of
the choice. One complication however, is the fact that the change
in the top job will come very shortly after a number of staff changes,
particularly the Chief and Financial Secretaries. There is a worry that
a completely new team might have a mandate from Whitehall for a number
of fundamental changes. Here the big worry is over financial policy.
Time and again the point was made that a major shift from the attitude
of non intervention by government in economic affairs would be disastrous
for confidence. This is obviously a point which we must examine very
carefully when briefing is being prepared for the new Governor.
Mr Bremridge remains admirably non-committal on the whole question.
Hong Kong Economy
*
10. 1997 worries apart, confidence remains remarkably high and Hong Kong
has certainly weathered the recession so far much better than most
economies. The first quarter's figures for 1981 are reasonably good
and the prospects for a revival in orders for exports are not bad although
there are problems in primary textile products.
11.
There is, however, another aspect to the economy which affects
political problems. The bugbear is the high rate of inflation and the
fact that real incomes have not increased and in some cases have declined.
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/Opinions
1