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It became a prime aim of the Hong Kong Government to sustain that confidence. Accordingly, in speaking to the Legislative Council on October 6, I emphasised the faith of the Government in the future of the territory and its intention to continue to invest vigorously in it. Towards the end of the year a number of banks and other companies announced plans for new investment and for longer periods of credit for home ownership extending beyond 1997 which were helpful to the same end. In December Lord Belstead, the Minister of State responsible for Hong Kong affairs, visited Hong Kong. In his press conference he was able to advise people that it was the talks between the two governments which mattered and that they should not be prejudiced in their views by the semi-official comment emanating from Peking.
The
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By the spring of this year the atmosphere had become calmer. Order books for Hong Kong manufacturers began to lengthen. The unemployment rate rose only modestly to 4.3%. The budget decision to cover half of the fiscal deficit from reserves and half from increased indirect taxation without recourse to borrowing was accepted in public opinion as a prudent course. results of the major companies announced by the end of March showed substantially reduced profits, much of the reduction being due to the fall in the property market, but none of them appeared in danger of collapse. (The fate of some others is more problematical.) People had become, through familiarity with Chinese plans, less sensitive to their pronouncements.
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