CONFIDENTIAL
administration) might be devised to maintain Hong Kong's stability and prosperity. Attempting to explore Chinese ideas to see whether together, on the basis of China's proposals arrangements of lasting value can be agreed. Subject of course to Parliaments decision.
This approach agreed with EXCO Unofficials during visit to London
6-8 October.
CHINESE PROPAGANDA
6.
R
This continues. Has included allegations that HMG has conceded
to Chinese demands, attacks on us for obstructing the talks and public repetition of Chinese plan. Hong Kong opinion remains sceptical of it.
HONG KONG DOLLAR
7.
Despite healthy economic prospects, confidence hit by slow progress in talks and Chinese propaganda. Hong Kong dollar fell sharply in August and September. Measures introduced by Hong Kong Government in late September helped to stabilise local currency. Further important measures on 15 October have linked the Hong Kong
dollar indirectly to the US dollar. This is working so far.
VIEWS OF PEOPLE OF HONG KONG
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8. I was particularly interested in these during my visit 24-28
September. We continue to take them into account. But EXCO must be
central; broadly representative of general view.
PARLIAMENTARY INTEREST
9.
Hope Parliament can be brought to understand limitations.
Grateful for help in maintaining confidence in Hong Kong. Realise renewed Parliamentary interest likely soon but hope this and public interest kept to minimum at this sensitive stage. Interested to hear any further views you have on value of briefing MPs. How best
done? What about Opposition?
CONFIDENTIAL