PUBLIC SERVICE
THIS IS A COPY THE ORIGINAL HAS BEEN CLOSED FOR
40 YEARS UNDER FOI EXEMPTION No. 27. 642.....
8. MEMBERS OF THE PUBLIC SERVICE ARE CONCERNED ABOUT THE
CONTINUITY AFTER 1997 OF CONTRACTUAL RIGHTS AND OF OBLIGATIONS
BETWEEN THEM AND THE GOVERNMENT (PRINCIPALLY THE SECURITY OF
PENSIONS, BUT ALSO FOR THE UNDER 40'S THEIR CAREER PROSPECTS).
9. MANY MEMBERS OF THE PUBLIC SERVICE CONTINUE WITH MOUNTING
ANXIETY TO WAIT AND SEE WHAT HAPPENS OVER THE NEXT FEW MONTHS.
A HANDFUL OF MIDDLE-GRADE AND SENIOR OFFICERS HAVE RESIGNED
PREMATURELY IN ORDER TO EMIGRATE.
LOCAL OPINION
10. DISTRICT OFFICERS REPORT THAT PEOPLE ARE BECOMING INCREASINGLY APPREHENSIVE ABOUT THE FUTURE, AND THAT THERE IS
INCEASING TALK OF EMIGRATION. THE ANNOUNCEMENT ON 26 MARCH THAT
JARDINE MATHESON ARE FORMING A NEW HOLDING COMPANY IN BERMUDA INITIALLY CAUSED A MIXTURE OF SHOCK, DISMAY AND ANGER, THOUGH MOST RECENT REPORTS INDICATED THAT GRASS-ROOTS OPINION NOW GENERALLY ACCEPTS THAT JARDINES ACTED IN THEIR OWN INTERESTS. THE ANNOUNCEMENT ON THE SAME DAY OF A CASH BONUS ISSUE BY
HUTCHISON WHAMPCA HAS ALSO BEEN INTERPRETED IN SOME QUARTERS
AS A SIGN THAT THE COMPANY IS NOT PREPARED TO REINVEST ITS
PROFITS IN HONG KONG. APART FROM UNDERLYING NERVOUSNESS ABOUT THE FUTURE, THE MAIN CONCERNS AT LOCAL LEVEL, AS REPORTED BY
DISTRICT OFFICERS, ARE HOUSING, EMPLOYMENT AND EDUCATION.
ECONOMIC INDICATORS
11. DESPITE THE POLITICAL UNCERTAINTY, ECONOMIC INDICATORO
DURING THE FIRST QUARTER WERE GENERALLY ENCOURAGING. THERE WAS
A RECOVERY OF EXPORTS AND IMPORTS: AND UNEMPLOYMENT FIGURES SHOWED
CONTINUED STABILITY. IN MARCH THERE WERE THE FIRST SIONS THAT
THE INFLATIONARY CONSEQUENCES OF LAST YEAR'S DEPRECIATION OF THE
HONG KONG CURRENCY (PRIOR TO THE LINKING WITH THE U.S. DOLLAR) ARE BEGINNING TO SUBSIDE. A NUMBER OF MAJOR COMPANIES, INCLUDING SOME PROPERTY COMPANIES, REPORTED DETTER THAN EXPECTED RESULTS.
12. AN INCREASING REALISATION THAT AN APPRECIATION OF THE HONG KONG
DOLLAR WAS UNLIKELY CAUSED SOME CUTFLOW OF MONEY DURING MARCH WITH A CONSEQUENT NARROWING OF THE DIFFERENTIAL BETWEEN MARKET INTEREST
RATES FOR HONG KONG DOLLARS AND THOSE FOR UK DOLLARS. DESPITE THIS
SECONDARY CCCURRENCE THE OVERALL POSITION REMAINED ONE OF CONSIDERADLE CAPITAL INFLOW.
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13. DEMAND FOR PRIVATE RESIDENTIAL PROPERTY (EXCEPT SMALL UNITS) REAMINS WEAK, THOUGH SOME DEMAND CONTINUES FOR SELECTIVE COMMERCIAL AND INDUSTRIAL PROPERTY.
INDUSTRIALISTS STILL SEEM RELUCTANT TO INVEST IN HONG KONG ON ANY SIGNIFICANT SCALE (HONG KONG TELEGRAM NO. 487, PARAGRAPH 9), THOUGH THERE ARE SIGNS THAT INVESTMENT IN PLANT AND MACHINERY MAY HAVE PICKED UP IN RECENT MONTHS, PERHAPS AS A LAGGED RESPONSE TO THE RECOVERY OF THE EXPORT SECTOR.
14. THE HANG SENG INDEX (THE MOVEMENTS OF WHICH SHOULD BE VIEWED WITH GREAT CAUTION) HAS CONTINUED TO PERFORM GENERALLY WELL. ON 19 MARCH IT REACHED A PEAK OF 1170, ITS HIGHEST LEVEL SINCE AUGUST 1932. IT FELL SHARPLY AT THE END OF MARCH FOLLOWING NEWS OF JARDINE MATHESON'S DECISION TO FORM A NEW HOLDING COMPANY IN BERMUDA. BUT THE INDEX HAS SINCE STAGED A SUBSTANTIAL RECOVERY.
15.
THE ANNOUNCEMENT IN FEBRUARY THAT CABLE AND WIRELESS WERE TAKING OVER THE HONG KONG TELEPHONE COMPANY WAS INTERPRETED LOCALLY AS AN IMPORTANT INDICATION OF BRITISH BUSINESS CONFIDENCE IN THE FUTURE OF HONG KONG. THE RECENT STATEMENT BY SIR JEREMY MORSE THAT LLOYDS BANK (PACE ITS APPALLING RECORD) PLANNED NO REDUCTION IN ITS PRESENCE IN HONG KONG DESPITE THE 1997 ISSUE HAS ALSO BEEN REPORTED POSITIVELY HERE. SO HAS THE RECENT STATEMENT BY THE HONG KONG DIRECTOR OF INDUSTRY IN LONDON THAT SOME 50 LOCAL AND OVERSEAS MANUFACTURERS WERE EXPANDING THEIR OPERATIONS IN HONG KONG.
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16. LAST OCTTBER'S CURRENCY STABILISATION MEASURES CONTINUE TO BE MORE SUCCESSFUL THAN WE DARED TO HOPE.
17. WITHOUT 1997 PROBLEMS HONG KONG WOULD NOW BE ENJOYING ANOTHER BOOM.
HADDON-CAVE
FUTURE OF HONG KONG
COPTES TO:
PLANNING STAFF
FUSD
D/ED/FUSD
PES E. (
TALKER)
BUCKINGHAM PALACE
THIS IS A COPY THE ORIGINAL HAS BEEN CLOSED FOR
--------
40 YEARS UNDER FOI EXEMPTION No: 2766)..........
PS/LORD PRESIDENT OF SE COUNCIL
PS/HOME SECRETARY
PS/CHANCELLOR OF TE EKOSEQUER
PS/LORD PRIVY SEAL
PS/SECRETART FOR TRADE & INDUSTRY
COPIES TO: (VIA ADR)
ver
LEGAL ADVISER (MR. FREELAND)..
PS
PS/LADY YOUNG
PSAR LUCE
PS/FUS
SER J BULLARD
SIR 7 ELEDING VR WILSON
R TIGT
SIR C TICKELL
MR ROBERS
55
HR BURROWS
4 SECRET
1375 D
LEGAL EDVS
COLES NO 10 DOWNING ST
MR MARTIN ASSESSMENT STAFF CABINET OFFICE
MR GOODANT, CABINET OFFICE
MR BRENNAN CABINET OFFICE
PS/S OF S FOR DEFENCE D PS/ATTORNEY GENERAL
SIR ? CRADOCK EN K195
SIR P CRADOCK NO 10 DOWNING STURLIGT
"
CONFIDENTIAL
14
COPY
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GRS 91
CONFIDENTIAL
FM FCO 031300Z APR 84
TO IMMEDIATE HONG KONG
TELEGRAM NUMBER 625 OF 03 APRIL
INFO IMMEDIATE PEKING
FOR DAVIES FROM CLIFT
MKK040/23
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JB 1914
YOUR TELNO 487 FUTURE OF HONG KONG: ASSESSMENT OF PUBLIC OPINION
1. IT WOULD BE A USEFUL EXERCISE IF YOU COULD PREPARE A
FURTHER ASSESSMENT OF PUBLIC OPINION IN HONG KONG BEFORE
THE SECRETARY OF STATE'S VISIT. I APPRECIATE HOWEVER THAT YOUR
WORK-LOAD MAY PROHIBIT THIS. IF IT IS POSSIBLE FOR YOU TO PROVIDE
AN ASSESSMENT WE WOULD NEED IT BY
12 APRIL TO INCLUDE IN THE SECRETARY OF STATE'S BRIEFING.
HOWE
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DISTRIBUTION:
HKD
FED
Mr. Drúm
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CONFIDENTIAL
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