GR800 RESTRICTED
DESK BY 24123OZ
RESTRICTED
FM HONG KONG 24113OZ SEP 83
TO IMMEDIATE FCO
TELEGRAM NUMBER 1402 OF 24 SEPTEMBER
TOP COPY
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PEK.LMG
INFO IMMED HATE HONG KONG GOVERNMENT OFFICE LONDON, INFO PRIORITY HK GOVT REPS WASHINGTON, CG NEW YORK, UKIS GENEVA,
BRUSSELS
THE FUTURE: PRESS COVERAGE.
MKK0402
RECEIVED IN REGISTRY
INDE
ASEP 1983
SK OFFICER
THE COMMUNIST PRESS HAS CONTINUED HITS UNRELENTING BARRAGE OF PROPAGANDA. WITHIN AN HOUR OF THE RELEASE OF THE JOINT STATEMENT ANNOUNCING THE NEXT ROUND OF TALKS, THE NCNA ISSUED A STATEMENT ATTACKING THE NOTION THAT BRITISH ADMINISTRATION IS INDISPENSABLE TO THE FUTURE OF HONG KONG. THE PROSPERITY OF HONG KONG HAS BEEN ACHIEVED MAINLY AS THE RESULT OF THE DILIGENCE, WISDOM AND METICULOUS MANAGEMENT OF THE FIVE MILLION HONG KONG RESIDENTS OF WHOM OVER 98 PERCENT ARE CHINESE COMPATRIOTS. ANOTHER IMPORTANT FACTOR HAS BEEN THE VIGOROUS SUPPORT BY THE CHINESE
MAINLAND.
2. THE LEFT WING WEN WEN PO AND TA KUNG PAO QUOTED A NUMBER OF INDEPENDENT OBSERVERS AS CALLING ON THE GOVERNMENT TO TAKE POSITIVE ACTION TO SALVAGE THE DOLLAR AND CURB ANY SUBSEQUENT PRICE RISES. TOGETHER WITH THE NEW EVENING POST THEY COMMENTED THAT THE SLIDE OF THE DOLLAR WAS ATTRIBUTABLE TO GOVERNMENT ›INACTION, ULTERIOR MOTIVES ON THE BRITISH SIDE AND MOVEMENT TO CONDONE SPECULATORS IN THE FOREIGN EXCHANGE MARKET. THERE WERE ALSO SUGGESTIONS THAT THE HK GOVERNMENT'S 'FRANTIC TAX AND CHARGE INCREASES'', AND HIGH INFLATION AND LAND PRICE POLICIES WERE TO BLAME AND WARNINGS THAT THE GOVERNMENT SHOULD NOT PLAY WITH FIRE. THE INDEPENDENT HONG KONG ECONOMIC JOURNAL SUGGESTED THAT THE GOVERNMENT SHOULD SEEK FOREIGN LOANS TO PROP UP THE DOLLAR AND CALLED ON LEFT WING PAPERS IN PEKING AND HONG KONG TO CEASE THEIR ATTACK ON GOVERNMENT. THE FINANCIAL DAILY SUGGESTED THAT THE CONFIDENCE CRISIS WAS NOW CLOSE TO THE POINT OF NO RETURN. THE HONG KONG DAILY NEWS AND MING PAO SAID THAT THE DOLLAR CRISHS WAS DUE TO PEKING'S FAILURE TO UNDERSTAND THE IMPORTANCE OF THE STATUS QUO. MING PAO ADDED THAT THE HONG KONG ECOMOMY WAS FUNDAMENTALLY VERY SOUND, GOVERNMENT ACCOUNTS WERE IN GOOD ORDER AND THE RESERVES WERE HEALTHY. UNLESS THE CONCERNED PARTIES WISHED TO DESTROY THE DOLLAR, THERE WERE NO REASONS WHY IT SHOULD COLLAPSE. A REPORT FILED BY SING PAO'S REPORTER IN PEKING QUOTED MR LU PING, A CHINESE DELEGATE TO THE TALKS, AS SAYING THAT HE WAS EXTREMELY SURPRISED BY THE HONG KONG DOLLAR'S NOSEDIVE AND THAT THIS WAS IMPOSSIBLE.
3. THE PRIME MINISTER'S REMARKS TO JOURNALISTS YESTERDAY WAS
WIDELY REPORTED. TA KUNG PAO HEADLINED THE REPORT AND REMARKED THAT SHE WAS MERELY DEFENDING COLONIALISM.
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