Annex A
Hong Kong
The Political/Economic Scene
The Sino-British Joint Declaration on Hong Kong' B future after
1997 was signed in 1984 and provides for the continuation of the
rights and freedom that Hong Kong enjoys now and of its capitalist
system. Work on implementing the agreement proceeded steadily and
Hong Kong enjoyed an economic boom and a growing sense of
confidence until the student democracy movement in China was
suppressed by the Chinese Army in June 1989. People in Hong Kong
were emotionally swept up in the movement and as a result suffered
a damaging blow to their confidence in their future as part of
China. Hong Kong's customary resilience has subsequently
re-asserted itself but the continuing unease is illustrated by the
high level of emigration from the territory.
Business confidence in Hong Kong is strong and has recovered well
since the agreement with China. Continued economic and export
growth greatly assisted in this. GDP growth averaged 7% through
the 1980's but there is currently a slow down due to a tight
labour market, inflation and, perhaps more importantly, a general
slowing of the worlds economy. Official estimates for GDP growth
in 1990/91 are 2-2.5 %. It is noteworthy that throughout the past
two years of the economic austerity programme in China those parts
of the Chinese economy which have strong links with Hong Kong
(chiefly in Guangdong Province) have continued to function well.