CONFIDENTIAL
FM HONG KONG
TO IMMEDIATE FCO
TELNO 3428
OF 14105OZ SEPTEMBER 87
INFO PRIORITY PEKING
CONFIDENTIAL
нив ozila
027/7
060635 MDHIAN 2820
108
TOP COPY
DIST ?
YOUR TELNO 2095 : LORD GLENARTHUR'S VISIT : BRIEFING : HONG KONG :
THE CURRENT MOOD
SUMMARY
1.
ECONOMIC CONFIDENCE IS HIGH.
POLITICAL CONFIDENCE IN THE
FUTURE REMAINS UNCERTAIN. CURRENTLY IT IS DOMINATED BY THE DEBATE ON THE GREEN PAPER, NOW IN ITS FINAL STAGES. RESOLUTION OF THE RECENT EX-CHINA VIETNAMESE ILLEGAL IMMIGRANTS INFLUX WAS WIDELY ACCLAIMED. DOUBTS HAVE REVIVED ABOUT THE ACCEPTABILITY OF THE BN (0) PASSPORT. DESPITE SIGNS THAT THE CHINESE MAY BE ADOPTING A MORE CONCILIATORY ATTITUDE IN THE CURRENT DEBATE ON POLITICAL REFORM, THE PUBLIC CONTINUES TO REGARD CHINESE ACTIONS IN GENERAL WITH SUSPICION.
DETAIL
2=
DESPITE A GREAT DEAL OF MEDIA COVERAGE OF THE ISSUE OF DIRECT ELECTIONS, MOST PEOPLE IN THE TERRITORY HAVE THEIR ATTENTION FOCUSSED ON MORE MUNDANE ISSUES. A MONTH AFTER THE MAY PUBLICATION OF THE GREEN PAPER ON REPRESENTATIVE GOVERNMENT, A CONFIDENTIAL GOVERNMENT OPINION POLL SHOWED THAT FAR MORE PEOPLE WERE MORE CONCERNED WITH PRACTICAL EVERYDAY PROBLEMS SUCH AS TRANSPORT AND HOUSING THAN WITH THE FUTURE.
3.
ECONOMICALLY HONG KONG IS DOING WELL. THE OUTLOOK REMAINS BULLISH IN THE MEDIUM TERM. IN REAL TERMS THE FIRST HALF OF 1987
49 SAW INCREASES OVER 1986 OF 27 PERCENT IN DOMESTIC EXPORTS, PERCENT IN RE-EXPORTS, AND 35 PERCENT IN IMPORTS. UNEMPLOYMENT IS AT AN HISTORIC LOW (1.8 PERCENT IN THE SECOND QUARTER). BUT, AS A RESULT SIGNIFICANT UPWARD PRESSURE IS BEGINNING TO BE FELT ON WAGES AND SALARIES. AS A CONSEQUENCE BOTH OF THIS PRESSURE AND THE DECLINE IN VALUE OF THE HONG KONG CURRENCY IN LINE WITH THE US DOLLAR, INFLATION IS LIKELY TO RISE IN THE COMING MONTHS.
THE PROPERTY MARKET REMAINS ACTIVE. INVESTMENT FIGURES ALSO LOOK GOOD. RETAINED IMPORTS OF CAPITAL GOODS GREW BY 25 PERCENT IN REAL TERMS IN THE FIRST HALF OF 1987 COMPARED WITH 1986.
5.
1
PAGE CONFIDENTIAL
IN