CONFIDENTIAL
FM HONG KONG
TO PRIORITY FCO
TELNO 4711
OF 310445Z DECEMBER 88
INFO ROUTINE PEKING
CONFIDENTIAL
38
124336 MDLIAN 5196
HKB 02618
03.
TO a bor 2
LORD GLENARTHUR'S VISIT: CURRENT MOOD
GENERAL SUMMARY
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THE ECONOMY CONTINUES TO BE BUOYANT. OUR PROBLEMS A TIGHT LABOUR MARKET AND INFLATION ARE PROBLEMS OF SUCCESS. THEY AND THE PROSPECT OF MAJOR INFRASTRUCTURAL PROJECTS SUCH AS THE NEW AIRPORT CREATE A FOUNDATION FOR CONFIDENCE IN FUTURE PROSPECTS. BUT UNDERLYING CONCERN OVER 1997 REMAINS STRONG, BASED ON A GENERAL MISTRUST OF THE MAINLAND
2. MOST PEOPLE STILL SHOW LITTLE INTEREST IN THE DETAILS OF THE BASIC LAW. THE MEDIA TAKES MORE INTEREST IN THE SUBJECT THAN THE MAN IN THE STREET. THERE WAS INITIALLY GENERAL RECOGNITION THAT MOST OF THE MAIN POINTS OF CONCERN IN THE FIRST DRAFT HAD BEEN DEALT WITH. THIS HAS BEEN OVERTAKEN BY A ROW ABOUT THE PACE OF CONSTITUTIONAL CHANGE AFTER 1997: ANGER FROM THE RADICALS ABOUT THE CONTENT OF, AND WAY OF PUTTING FORWARD, PROPOSALS FOR THE SECOND DRAFT: AND SOME CONCERN AMONGST MORE CONSERVATIVE ELEMENTS ABOUT THE USE OF OPENLY CONFRONTATIONAL TACTICS BY THOSE WHO ADVOCATE ACCELERATED
DEMOCRATIZATION.
3. THE VIETNAMESE BOAT PEOPLE AND THEIR INTERNATIONAL SUPPORTERS ARE WIDELY RESENTED. THE HKG'S POLICY IS CRITICISED LOCALLY FOR BEING TOO SOFT AND INTERNATIONALLY AS TOO HARSH. LOCALLY MUCH OF THE CRITICISM IS EXTENDED TO HMG.
DETAIL
THE ECONOMY
4. HONG KONG'S EXTERNAL TRADE FOR THE FIRST NINE MONTHS OF 1988 HAS CONTINUED TO SHOW SIGNIFICANT GROWTH. THIS HAS LARGELY BEEN BASED ON THE STRONG PERFORMANCE OF RE-EXPORTS, UP 45 PERCENT IN REAL TERMS. DOMESTIC EXPORTS HAVE INCREASED BY 8 PERCENT, SIGNIFICANTLY LESS THAN IN 1987.
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