CONFIDENTIAL.
CONFIDENTIAL
STATEMENTS MADE OUTSIDE THEM ARE
24496 - 1
NOT HELPFUL. THE PLACE FOR AN EXCHANGE OF VIEWS IS THE
CONFERENCE TABLE.
8. ON RECENT FLUCTUATIONS IN HONG KONG STOCK MARKET AND DOLLAR
EXCHANGE RATES ALTHOUGH UNCERTAINTY ABOUT FUTURE UNDOUBTEDLY
AFFECTS CONFIDENCE, THERE ARE OTHER FACTORS TOO, EG WORLD
RECESSION, STRENGTH OF US DOLLAR AND HIGH INTERNATIONAL
INTEREST RATES. GIVEN UNDERLYING STRENGTH OF HONG KONG'S ECONOMY
THE HONG KONG DOLLAR IS MUCH UNDERVALUED.
9. IF HONG KONG IS RAISED IN CHINA WITH PRESIDENT MASIRE HE
MIGHT WISH TO DRAW ON THE FOLLOWING IF APPROPRIATE.
BUT IT IS IMPORTANT THAT HE SHOULD NOT GIVE IMPRESSION SPEAKING
ON HMG'S BEHALF.
A) COMMON SINO/BRITISH AIM IN TALKS GIVES CAUSE FOR
CONFIDENCE THAT A SATISFACTORY NEGOTIATED SETTLEMENT CAN BE
REACHED ·
B)
CENTRAL ISSUE APPEARS TO BE NEED FOR ARRANGEMENTS IN WHICH
HONG KONG PEOPLE AND INVESTORS WILL HAVE CONFIDENCE
C) CHINESE HAVE FLOATED IDEA OF HONG KONG AS A SPECIAL.
ADMINISTRATIVE REGION UNDER CHINESE CONSTITUTION AND FUNCTIONING
ESSENTIALLY AS IT DOES NOW. MANY HONG KONG PEOPLE
If
SCEPTICAL. THEY, AND INVESTORS, NEED GUARANTEES OF NON-
INTERFERENCE IN THEIR AFFAIRS.
D) UNDERSTAND THAT BRITAIN OBTAINS FROM HONG KONG ONLY REVENUE
OF NORMAL TRADING PARTNERS.
HOWE
LIMITED
HD/HKD
HDY'S AF D HD/FED
PS
PS/MR LUCE
PS/MR RIFKIND
PS/PUS MR DONALD
MR SQUIRE
2
CONFIDENTIAL
1