CODE 18-77

HK DACM

Mr Leeks

нив

HWB 027/7

C4

CASET 1907

LORD GLENARTHUR'S VÍSIT TO HONG KONG

1.

Reference................

Jet send. =PA

ale 3/9

75

Your minute of 2 September (attached). I think your answers are fine. My only comment is on (d), the second sentence. I would qualify this as "business confidence". In other respects confidence is not necessarily high, and Lord Glenarthur might be open to criticism for a glib assertion against the evidence of emmigration etc. I agree it would be right to clear our answers with Hong Kong.

My suggested answer to (c) is as follows. Please tinker with it if you wish.

2.

Unquestionably it has been beneficial. I think that without that agreement you would by now have seen confidence and investment ebbing from Hong Kong as 1997 drew nearer. But. with the agreement, look at the state of Hong Kong's economy now it's thriving. It continues to be a good place in which to live and work. This partially answers the second half of your question, because it is firm evidence that the agreement is holding up well. A further respect in which it is doing so is the continuing, absolute commitment we and the Chinese share to seeing the agreement fully and faithfully implemented. The Joint Liaison Group and the Land Commission have produced a series of practical achievements towards its implementation. I have every confidence that they will

Co-operation between the two

continue to do so in future. sides is excellent.

3 September 1987

T W M Smith

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