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a sustained campaign of intimidation against LegCo
members. We have already seen evidence of crude threats
involving members' business interests in China, and their
hopes for preferment in Hong Kong post-1997;
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a similar effort to frighten members of the business
community.
quarter;
We have already heard the first jitters from that
a continuing refusal to agree financing arrangements for the new airport;
a freeze on progress in the Joint Liaison Group.
But the Chinese also need to weigh up their own significant economic interests in Hong Kong. I very much doubt that they will disrupt trade or financial links with
Southern China, or turn to the more extreme forms of pressure
such as interference with supplies across the border. They
also seem to be ready so far to let Sino/ British contacts in
other areas continue largely unaffected. But we do not know
how long this will last.
The immediate issue is whether support for the Governor's package will hold up in Hong Kong under this Chinese onslaught. At present, the Hong Kong Government consider that
they can count on the firm support of about half of LegCo. It will be very helpful to have the Governor's assessment on 18
November. So far the markets are resilient (suggesting that
investors are taking a long term view of the potential of Hong
Kong and Southern China). But the Chinese have many forms of
economic and political blackmail at their disposal. Members
of the conservative pro-business grouping in LegCo are already
backing away from support for the Governor's proposals.
Chinese officials have threatened that if these are
implemented unchanged, China will begin to make arrangements
for establishing the Legislature, Administration and Judiciary
on a new basis after 1997. This may be bluff, but we cannot
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