CONFIDENTIAL

037262

MDHIAN 2677

CONFIDENTIAL

FM HONG KONG

TO DESKBY 21090OZ FCO

TELNO 1924

OF 210709Z JULY 92

INFO PRIORITY PEKING, UK REP JLG HONG KONG, BTC HONG KONG

THE SECRETARY OF STATE'S VISIT TO HONG KONG: MOOD OF THE

COMMUNITY

SUMMARY

1. SINCE THE SECRETARY OF STATE'S LAST VISIT TO HONG KONG IN APRIL 1991, THE MOOD OF THE COMMUNITY HAS ALTERED CONSIDERABLY. COMMUNITY AND BUSINESS SENTIMENT IS NO LONGER DEPRESSED BY DISPUTES WITH PEKING. INDEED, THE TERRITORY IS CURRENTLY MORE POSITIVE ABOUT ITS FUTURE THAN AT ANY TIME SINCE JUNE 1989, ALTHOUGH PUBLIC MOODS CAN ALWAYS CHANGE RAPIDLY. THE PRESENT WIDESPREAD OPTIMISM MAINLY REFLECTS THE HEALTHY STATE OF THE ECONOMY AND SOLID BUSINESS EXPECTATIONS FOR THE REST OF THE YEAR, REINFORCED BY EVIDENCE THAT DENG XIAOPING AND HIS ECONOMIC REFORM PROGRAMME ARE WINNING THE DAY WITHIN CHINA. CONFIDENCE HAS STOOD UP WELL TO INCREASING, AND INCREASINGLY PUBLIC, CHINESE PRESSURES OVER FINANCING FOR THE NEW AIRPORT AND FUTURE POLITICAL DEVELOPMENT. IN THE CURRENT DEBATE OVER THE COMPOSITION OF EXCO AND ELECTORAL ARRANGEMENTS FOR 1995, OPINION POLLS SUGGEST THAT THE PUBLIC WOULD LIKE A FAIRLY TOUGH LINE WITH PEKING, ALTHOUGH THE COMMUNITY WOULD PROBABLY BECOME MORE CONCILIATORY IN THE FACE OF SERIOUS CONFRONTATION WITH CHINA.

A CHANGE OF GOVERNORS

2.

THE DEPARTURE OF LORD WILSON AND THE ARRIVAL OF HIS SUCCESSOR HAVE DOMINATED PUBLIC AND MEDIA ATTENTION IN THE PAST FEW WEEKS. BUT INTEREST IN THE STYLE AND PERSONALITY OF THE NEW GOVERNOR HAS NOT DISTRACTED THE PUBLIC FORM IT S USUAL POLITICAL PRAGMATISM. THE COMMUNITY PLACES A HIGHER PRIORITY ON TACKLING PRACTICAL PROBLEMS OF IMMEDIATE CONCERN RATHER THAN ON ADDRESSING MORE ABSTRACT OR LESS PRESSING ISSUES. HENCE, AND OPINION POLL PUBLISHED THIS MONTH BY THE CHINESE DAILY, MING PAO, NOTED THAT OVER HALF THE RESPONDENTS IDENTIFIED EARLY SOLUTIONS FOR THE AIRPORT AND LAW AND ORDER AS THE FIRST PRIORITIES FOR THE NEW GOVERNOR. LESS THAN 20 PERCENT PUT ARRANGEMENTS FOR THE 1995 ELECTIONS OR EXCO'S COMPOSITION AT THE TOP OF HIS AGENDA.

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CONFIDENTIAL

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