CONFIDENTIAL
102151
MDHIAN 5889
CONTINUATIC OF DOUBLE-DIGIT INFLATION. FOR THE LONGER TERM, WE EXPECT THE RATE TO FALL BELOW 10 PER CENT DURING THE FIRST HALF OF 1992. BUT, AS EXPENDITURE ON THE AIRPORT MOUNTS, INFLATIONARY PRESSURES WILL INCREASE. ALTHOUGH THE LABOUR MARKET HAS IN RECENT MONTHS BECOME A LITTLE LESS TIGHT, IT CAN BE EXPECTED TO REMAIN THE SINGLE MOST IMPORTANT ECONOMIC CONSTRAINT, WITH A CONSIDERABLE PUBLIC DEBATE TAKING PLACE ON THE ARGUMENTS FOR AND
AGAINST IMPORTING LABOUR.
ELECTIONS
8. THE CONVENTIONAL WISDOM WAS THAT HONG KONG PEOPLE WOULD FEEL UNCOMFORTABLE WITH PARTY POLITICS. HOWEVER, THE PUBLIC (OR AT LEAST THAT PROPORTION THAT VOTES) RESPONDED POSITIVELY TO PARTY
LABELLING AND A CLEAR IDEOLOGICAL CHOICE IN THE DISTRICT BOARD AND THE MUNICIPAL ELECTIONS EARLIER THIS YEAR. NEVERTHELESS, THE PUBLIC'S ENTHUSIASM OF PARTICIPATION IN THE DEMOCRATIC PROCESS SHOULD BE SEEN IN PERSPECTIVE: ONLY HALF OF THOSE ELIGIBLE TO
REGISTER TO VOTE HAVE DONE SO, AND WELL UNDER HALF OF THOSE REGISTERED VOTED IN EITHER SET OF ELECTIONS.
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9. THE BETTER-ORGANISED ''LIBERAL OR PRO-DEMOCRACY PARTIES
EMERGED AS THE CLEAR WINNERS ON BOTH ELECTIONS. THE CONSERVATIVE, BUSINESS-BASED PARTY, THE LIBERAL DEMOCRATIC FEDERATION (LDF), PERFORMED POORLY. BUT THE PRO-CHINA CANDIDATES DID BETTER THAN MIGHT HAVE BEEN EXPECTED. IT SEEMS LIKELY THAT THE LIBERALS WILL
CAPTURE A MAJORITY OF THE DIRECTLY-ELECTED LEGCO SEATS IN SEPTEMBER. A PUBLIC OPINION POLL CONDUCTED IN LATE JUNE INDICATED THAT 51 PER CENT OF RESPONDENTS INTENDED TO VOTE FOR LIBERAL CANDIDATES IN SEPTEMBER. ONLY 13 PER CENT SAID THAT THEY INTENDED TO VOTE FOR THE LDF. THE UNITED DEMOCRATS OF HONG KONG (UDHK), LED BY MARTIN LEE AND SZETO WAH, WERE SUPPORTED BY 37 PER CENT OF RESPONDENTS.
VIETNAMESE MIGRANTS
10. THIS ISSUE REMAINS A MATTER OF DEEP PUBLIC CONCERN. IT HAS
BEEN OVERSHADOWED IN RECENT MONTHS BY THE TENSION IN THE RELATIONSHIP WITH THE PRC, BUT IT HAS NEVER BEEN FAR BELOW THE SURFACE. IT NOW SEEMS LIKELY THAT ARRIVALS FOR THE YEAR WILL BE ABOUT 20,000. A CONTINUING HIGH ARRIVAL RATE WILL FUEL PUBLIC CONCERN AND IMPATIENCE WITH THE POLICY OF FIRST ASYLUM. IT WOULD NOT TAKE MUCH FOR THE ISSUE TO BECOME LIVE AGAIN, PICULARLY IN THE RUN-UP TO THE LEGCO ELECTIONS. MUCH WILL DEPEND OUR SUCCESS IN ESTABLISHING IMCS IN VIETNAM AND IN SUCCESSFULLY RETURNING THOSE SCREENED OUT.
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