CONFIDENTIAL
7555
1
HELD IN STORE. FOLLOWING THE ANNOUNCEMENT OF THE AGREEMENT THE
FUTURE LOOKED MUCH MORE ASSURED. ONE YEAR FORWARD FROM THAT DATE
THERE ARE STRONG INDICATIONS OF A RETURN OF CONFIDENCE IN ALL
SECTORS OF THE COMMUNITY.
54.
OVER THE NEXT 12 MONTHS, THAT CONFIDENCE IS LIKELY TO BE MAINTAINED. SO FAR AS THE DEVELOPMENT OF REPRESENTATIVE GOVERNMENT IS CONCERNED, FOLLOWING THE RECENT CHANGES IN THE COMPOSITION OF THE LEGISLATIVE COUNCIL, THE COMING YEAR WILL BE A PERIOD OF CONSOLIDATION RATHER THAN NEW INITIATIVES. ON THE ECONOMIC FRONT, THE INDICATORS ARE REASSURING, NOTWITHSTANDING THE POSSIBILITY OF CONTINUING REDUCED DEMAND FOR DOMESTIC EXPORTS IN HONG KONG'S MAIN EXPORT MARKETS: EMPLOYMENT IS EXPECTED TO REMAIN STABLE AND THE RATE OF INFLATION LOW: THE RECOVERY OF THE PROPERTY MARKET IS LIKELY TO CONTINUE: AND THE PROSPECTS FOR A RETURN TO A BALANCED BUDGET IN 1986-87 ARE GOOD. THE SINO-BRITISH JOINT LIAISON GROUP AND LAND COMMISSION HAVE GOT OFF TO GOOD STARTS. HONG KONG IS ONCE AGAIN ABLE TO LOOK TOWARDS THE
FUTURE CALMLY AND CONFIDENTLY.
55. HER MAJESTY'S GOVERNMENT REMAIN COMMITTED TO THE TERRITORY
OF HONG KONG AND TO ITS PEOPLE. THEY WILL CONTINUE TO FULFILL
THEIR RESPONSIBILITIES FOR HONG KONG'S SOUND ADMINISTRATION AND TO LOOK AFTER HONG KONG'S INTERESTS INTERNATIONALLY. THEY WILL WORK TO ENSURE THE SMOOTH IMPLEMENTATION OF THE SINO-BRITISH JOINT DECLARATION, AND TO PRESERVE ECONOMIC PROSPERITY AND SOCIAL
STABILITY.
HOWE
ENDS.
HONG KONG AGREEMENT : RESTRICTED
LIMITED
HD/HKD
HD/FED
COPIES TO:
MR FIFOOT, LEGAL ADVISERS MR WOOD LEGAL ADVISERS
RESEARCH D (FE)
D/HD PUSD
MR WILSON
CONFIDENTIAL
}