CONFIDENTIAL
196
102151
MDHIAN 5889
CONFIDENTIAL
FM HONG KONG
TO DESKBY 18123OZ FCO
TELNO 2290
OF 181114Z JULY 91
HKD $26
RECEIVED
026/1
19 JUL 1991
FICER
Pi
TOP COPY Q DIST?
YOUR TELNOS 1273 AND 1300: LORD CAITHNESS'S VISIT TO HONG KONG: THE PUBLIC MOOD.
SUMMARY
1. RELATIONS WITH THE PRC AND ECONOMIC MATTERS HAVE BEEN THE MAIN ISSUES OF PUBLIC INTEREST SINCE LORD CAITHNESS LAST VISITED ONG
KONG IN JANUARY. THE ANNOUNCEMENT OF ME MEMORANDUM OF UNDERSTANDING (MOU) WITH CHINA OVER THE NEW AIRPORT WAS WIDELY WELCOMED, ALTHOUGH ANXIETIES REMAIN IN SOME SECTIONS OF THE COMMUNITY ABOUT THE IMPLICATIONS OF THE AGREEMENT FOR HONG KONG'S AUTONOMY, BOTH BEFORE AND AFTER 1997. THE AIRPORT AGREEMENT HAS BRIGHTENED THE ECONOMIC OUTLOOK, DESPITE CONTINUING CONCERNS ABOUT INFLATION. THE OTHER ISSUES ON WHICH PUBLIC ATTENTION HAS FOCUSED RECENTLY ARE THIS YEAR'S ELECTIONS, VIETNAMESE BOAT PEOPLE, LAW AND ORDER, THE QUALITY OF PUBLIC SERVICES AND, MORE RECENTLY, THE CLOSURE OF THE LOCAL SUBSIDIARY OF THE BANK OF CREDIT AND COMMERCE INTERNATIONAL (BCCI).
THE AIRPORT AND RELATIONS WITH CHINA.
2. NEWS OF THE MOU WAS GREETED WITH A COLLECTIVE SIGH OF RELIEF. THE IMPASSE HAD CAST A DARK SHADOW OVER BOTH HONG KONG'S RELATIONSHIP WITH THE PRC AND THE BUSINESS OUTLOOK. THE SUCCESSFUL CONCLUSION OF THE NEGOTIATIONS HAS BRIGHTENED THE PUBLIC MOOD, AND OPTIMISM HAS REVIVED ABOUT BETTER PROSPECTS FOR A SMOOTH TRANSITION TO CHINESE SOVEREIGNTY OVER THE NEXT SIX YEARS. THE PUBLIC SEES THE AGREEMENT AS HAVING ESTABLISHED NEW GROUND RULES FOR HMG/HKG/PRC CO-OPERATION DURING THE REMAINING YEARS OF BRITISH SOVEREIGNTY.
3. THE PROTRACTED NEGOTIATIONS OVER THE NEW AIRPORT ARE WIDELY SEEN AS MARKING A WATERSHED IN HONG KONG'S RELATIONSHIP WITH
CHINA. THE PUBLIC HAS ACCEPTED THE IMPORTANCE OF THE AIRPORT PROJECT FOR HONG KONG'S ECONOMIC DEVELOPMENT, BUT HAS ALSO RECOGNISED THAT BEYOND THIS IMMEDIATE ISSUE IS THE UNDERLYING QUESTION OF AUTONOMY. PUBLIC OPINION POLL EVIDENCE HAS SHOWN CONSISTENTLY HIGH LEVEL OF SUPPORT (65 TO 70 PER CENT) FOR THE AIRPORT PROJECT ITSELF, AND ALSO STRONG SUPPORT FOR RESISTING PRC
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