GRS 850
CONFIDENTIAL
CONFIDE
FM HONG KONG 10091OZ AUG BL
TO IMMEDIATE F C O
TELEGRAM NUMBER 2321 OF 10 AUGUST
INFO PRIORITY PEKING
Нікколо 25
Koge
13 AUG 1984
44
Tak
шна
OUR TELNO. 2067: FUTURE OF HONG KONG: FORTNIGHTLY REPOFF-OH-/PUBLIC
OPINION.
THE SECRETARY OF STATE'S PRESS STATEMENT ON 1 AUGUST WAS GREETED IN HONG KONG WITH RELIEF, SYMBOLISED BY THE 67-POINT RISE BY THE HANG SENG INDEX THE FOLLOWING DAY. WHILE THERE IS A RECOGNITION THAT THERE ARE STILL PROBLEMS AHEAD, MOST PEOPLE NOW EXPECT THAT THEY WILL BE SOLVED. THERE IS A WIDESPREAD FEELING THAT EVENTS ARE NOW MOVING SWIFTLY, IN A GENERALLY SATISFACTORY DIRECTION, AND THAT THE FINAL VEIL OF CONFIDENTIALITY IS LIKELY TO BE LIFTED BEFORE THE END
OF SEPTEMBER.
G
1.E.
2. PRIOR TO THE PRESS CONFERENCE, THE ATMOSPHERE WAS BECOMING INCREA~ SINGLY DEPRESSED AND NERVOUS. ON THE OTHER HAND, SOME DISTRICT OFFICERS HAD NOTED AN INCREASING SENSE OF 'REALISM''
A
READINESS TO ADJUST TO THE IDEA OF LIVING UNDER CHINESE SOVEREIGNTY, AND A GROWING FEELING AMONGST THE PUBLIC THAT A JOINT LIAISON GROUP
IN HONG KONG WOULD BE TOLERABLE PROVIDED ITS TERMS OF REFERENCE WERE TIGHTLY DRAWN. THE INDEPENDENT COMMISSION AGAINST CORRUPTION HAS NOTED A FEELING THAT CORRUPTION MAY INCREASE AS PEOPLE ARE TEMPTED TO INSURE AGAINST THE UNCERTAINTIES OF 1997 BY GETTING RICH QUICK.
3. IN SHORT, HONG KONG OPINION IS VERY VOLATILE. THE PENDULUM SWUNG UPWARDS FOLLOWING THE SECRETARY OF STATE'S VISIT.
4. THERE HAVE BEEN SOME SIGNS OF INCREASING KMT ACTIVITY DURING THE PAST THREE WEEKS. AT THE OTHER END OF THE SPECTRUM, LEFT-WING ORGANISATIONS ARE MOBILISING THEIR SUPPORTERS TO REGISTER IN PREPARATION FOR 1985 DISTRICT BOARD ELECTIONS.
ECONOMIC INDICATORS
5. THE EXPORT SECTOR CONTINUES TO GROW. COMPARING THE FIRST HALF OF 1984 WITH THE FIRST HALF OF 1983, DOMESTIC EXPORTS GREW BY 45 PER- CENT IN VALUE TERMS, RE-EXPORTS BY 55 PERCENT AND IMPORTS BY 39 PERCENT. THE YEAR-ON-YEAR RATE OF INFLATION CONTINUES TO FALL (FROM 12.6 PERCENT IN JANUARY TO 9.7 PERCENT IN JUNE). THE EXCHANGE RATE REMAINS UNDER SOME PRESSURE, THOUGH MUCH LESS THAN A MONTH AGO. A 2 PERCENT DECREASE IN INTEREST RATES ON 7 AUGUST HAD LITTLE EFFECT ON THE HONG KONG DOLLAR.
6. THE NUMBER OF FOREIGN BUSINESS ESTABLISHMENTS REGISTERED IN HONG KONG INCREASED BY 11 PERCENT DURING THE FIRST HALF ON 1984. US-FUN- DED COMPANIES TOPPED THE LIST OF NEW FIRMS, FOLLOWED BY SINGAPORE- FINANCED COMPANIES. TWO MAJOR JAPANESE BANKS WILL START OPERATING
SHORTLY.
CONFIDENTIAL
I PUBLIC