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CONFIDENTIAL
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DSR 11C
In speech to Legislative Council in October Governor
emphasised Hong Kong Government's intention to invest
vigorously in Hong Kong's future and its people and to
continue with the development of the territory.
!
Lord Belstead has just visited Hong Kong (6 10 December).
The Main purpose of his trip was to exchange views on the
future. I myself am going there in
very much 'Business as usual'.
Fanuary
It is
DEFENSIVE
Hong Kong Stock Market and Dollar Exchange Rate
There have been some sharp fluctuations since the
Prime Minister's visit. But Hong Kong's Hang Seng Index is
well known for being volatile. Many factors have affected
the market: world recession, reduced growth forecasts,
declining property prices and high international interest
rates. Hong Kong dollar likewisecaffected by strength of
US dollar.
Chinese Propaganda
Although the content of talks is confidential there is
naturally considerable rumour and speculation in Hong
it Kong, much of which Chinese inspired. However, we are
sure Chinese agree that nothing should be done to damage
confidence in Hong Kong. It is the talks that count, as
the Hong Kong people recognise, and we do not regard
their outcome as prejudged by anything said outside.
CONFIDENTIAL