SECRET
Exchange Index fell sharply.
11. Corrective measures by Hong Kong Government. Announcement on 15 October indirectly pegging Hong Kong to US dollar ($HK7.80 $US1) and abolishing local tax on Hong Kong currency deposits. Currency and Stock market responding well.
12. In continuing close consultation with Hong Kong. I visited Hong Kong 24-28 September. Governor and EXCO Unofficials again in London for discussions 6-8 October.
B.
WITH COUNCIL OF FOREIGN RELATIONS
يا اللي باله
13.
Encouraging that second phase of talks under way with common
aim of maintaining Hong Kong's stability and prosperity. Joint communiqué referred to 'useful and constructive' session 19/20 October. Talks will reconvene 14/15 November. Content
confidential.
14.
Good Sino-British relations. Agreed common aim HMG seek settlement acceptable to Britain, China and people of Hong Kong, whose views are being taken fully into account. Optimistic.
1
Kong,
SECRET