CONFIDENTIAL
KONG'S CONCERN BUT I FEEL FIRMLY IN THE SADDLE.
19543
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HONG KONG STOCK MARKET AND EXCHANGE RATE FLUCTUATIONS: 28.
SHARP FLUCTUATIONS IN THE HANG SENG INDEX ARE MORE COMMON
THAN IN WESTERN STOCK EXCHANGES. IN 1973 THE INDEX FELL FROM
1700 TO LITTLE MORE THAN 200. OF COURSE UNCERTAINTY OVER THE
FUTURE FROM TIME TO TIME AFFECTS THE MARKET BUT THERE ARE OTHER
FACTORS SUCH AS THE WORLD RECESSION, REDUCED GROWTH FORECASTS,
DECLINING PROPERTY PRICES, HIGH INTERNATIONAL INTEREST RATES AND
THE STRENGTH OF THE US DOLLAR DOLLAR AFFECT THE MARKET.
:
DECLINING CONFIDENCE IN HONG KONG:
29. I KNOW THERE IS GENUINE CONCERN HERE REFLECTED IN THE STOCK
MARKETS AND THE EXCHANGE RATE, ABOUT WHAT THE FUTURE HOLDS IN
STORE. THAT IS UNDERSTANDABLE AND WE ARE VERY CONSCIOUS OF THIS
IN LONDON. BUT THERE IS AN UNDERLYING STRENGTH IN THE HONG KONG
ECONOMY WHICH IS REFLECTED IN INDICATORS SUCH AS EXPORT
PERFORMANCE AND FULL ORDER BOOKS.
BRITISH SELL-OUT:
30. THIS SORT OF TALK IS HARMFUL AND UNTRUE. I WOULD LIKE TO
SAY THIS TO THE HONG KONG PEOPLE: WE HAVE BEEN TRYING THROUGH THE
TALKS TO OBTAIN THE BEST POSSIBLE DEAL FOR HONG KONG WHICH WILL
PRESERVE ITS PROSPERITY AND STABILITY. WE WILL CONTINUE TO DO
SO. WE ARE UNWAVERING AND UNITED IN OUR AIM TO SEEK A SETTLEMENT
WHICH WILL BE ACCEPTABLE NOT ONLY TO BRITAIN AND CHINA BUT ALSO
TO HONG KONG.
MR HEATH'S VISIT TO CHINA:
31.
THIS WAS A ENTIRELY PRIVATE VISIT. HE CARRIED NO OFFICIAL
MESSAGE TO OR FROM THE CHINESE.
MR HEATH'S EXCHANGE WITH EXCO:
32.
THERE WAS A MEETING BETWEEN MR HEATH AND EXCO MEMBERS. THIS
WAS AN ENTIRELY PRIVATE AFFAIR.
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CONFIDENTIAL