(a) British colonial rule in Hong Kong must be ended;

(b) Hong Kong's relationship with China is key to future prosperity;

(c) Doubts whether Britian had administered in Hong Kong in

interests of Hong Kong people;

(Comment: there were also arguments between Communist and

independent press about which views in Hong Kong represented "genuine" expressions of public opinion there, eg two left wing

papers criticised two Legco members' call to residents to express views on Hong Kong's future through UMELCO Office. Said this was

"playing the public opinion card" to put pressure on China. Only "public opinion" given weight by Hong Kong Government was that in

line with British interests.)

(xiii) Appointment of Ji Pengfei as Director of Chinese State

Council's Hong Kong and Macau Office

Main points:

(a) Appointment of this veteran diplomat illustrates importance

Peking attaches to status of Hong Kong and Macau;

(b) Ji, with his status, experience, qualifications and many friends

worldwide, an important "personnel card" in China's hand.

(xiv) Economy

Coverage given to:

(a) Financial Secretary's address to Federation of Hong Kong Industries 9 August. This noted growth of 9% in Hong Kong's domestic exports in real terms in first half of 1983 with consequent

gradual recovery of economy and drop in unemployment;

(b) H C Tang's (Chairman, Federation of Hong Kong Industries) call

to Government to give direct assistance to industry and to curb

inflation;

These

(c) Hong Kong Government trade figures for first half 1983.

showed 12% increase in merchandise trade over same period in previous year. Some papers guarded against excessive optimism because of protectionism, sluggish property market, outflow of

funds. Others said sustained recovery dependent on Government's

economic policy.

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