RESTRICTED
at
force of the agreement to continue liaison, consultation and the
exchange of information between the British and Chinese sides until
the year 2000. It will meet in Peking, London and Hong Kong,
least once in each place every year. From 1 July 1988, it will be based principally in Hong Kong. A Land Commission made up of British and Chinese officials will also be established in Hong Kong
after the entry into force of the agreement. It will conduct
consultations on the implementation of Annex III to the Joint
Declaration dealing with Land.
B.
HONG KONG AFTER THE AGREEMENT
(i)
6.
THE ECONOMY
Al 1 the indicators show that Hong Kong's economy, having borne the uncertainties of the past two years with resilience, is now
expanding with renewed confidence. The Hang Seng Index stood at
989.19 points on 1 October 1984,
1 October 1984, just after the initialling of the
draft agreement. On 1 May 1985 it stood at 1516.73. The linking of
the Hong Kong dollar to the US dollar in October 1983 has stabilised
the currency. The Hong Kong dollar on 1 May stood two cents higher
against the US dollar than it had six months before, and, like the
US dollar, is therefore very strong against other currenceis.
Hong Kong's Financial Secretary presented his budget for 1985/86
to Hong Kong's Legislative Council on 27 February. His budget
projects good economic prospects for Hong Kong in 1985:
7.
(a)
a growth rate in the GDP of 7%;
(b)
(c)
a growth in domestic exports of 11% and in re-exports of 30%,
giving a growth for total exports of 18%
a growth of private investment in plant machinery of 16% and in
building and construction of 2%; and
(d) an inflation rate of 5.5%.
8. The Financial Secretary forecast a budget deficit of HK$ 1
billion for the coming year. This follows three years of deficits,
produced by a combination of world recession, a fall in Hong Kong
property values, and political uncertainty over the future. With
DE OTR TOT PA