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of our GDP, we were heavily dependent on the wealth and lack of protectionism of other countries. The Chief Secretary added that internally generated investment was the real key to the
economy. The Financial Secretary added that since February
1982, when interest tax on foreign currency deposits was
abolished, there had been a growth in deposits of $125 billion
(or over $100 billion after inflation).
11. In reply to a question, the Governor said that the
professional and middle classes i.e. the mobile group, were suspending judgement until the outcome of the negotiations was
known. Mr Hawke asked what they wanted to hear in September.
Did they really want the Chinese to be more specific about their
plan ? The Governor said that what they wanted was assurance
that there would be no interference. There was no hostility
between Hong Kong and China and our trade and other relations
were good. But people wanted to be reassured that, if the
insulator of the UK presence was removed, there would be other
means to prevent interference.
12. Referring to the 12-point plan, Mr Hawke commented that the
Chinese had already said that the legal system would remain in
force. If this was right, this must surely be reassuring. The
Governor replied that the Chinese had said that the laws would
continue. But they needed to confirm also the essential separation
of the administration, the legislature and the executive.
The way
in which the legal system operated was as important as the content
of the law.
13. Mr Whitelaw asked if the recent upturn in exports was not due
largely to a devaluation of the Hong Kong dollar. The Financial
Secretary said that there had been a flight of foreign currency last
September but that had ceased with the fixing of the rate and exports
had increased in real terms. He agreed that it would be wrong to pretend that all was well with the economy.
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