CONFIDENTIAL
as its replacement loomed General confidence in the diminished by news of the The reaction within the units and nationalities:
presence of the PLA larger as a result. future had not been impending reductions. Garrison varied between
5.
a.
UK Personnel.
The UK personnel largely expected the news, and have accepted it.
b. LEP/LEC. Locally employed Chinese (both LEP and LEC) are more concerned, and LEP morale and retention could no longer be taken for granted. Redundancy terms were good however, and this had averted a real crisis. LEC had been taken aback by the extent and speed of the cuts but it was hoped the money on offer will secure their retention.
C. Gurkhas. CBFHK identified the Gurkhas as his largest concern. They are already implementing a 66% Options rundown, and this acceleration has caused real pain. CBF assessed that Gurkha morale has dropped considerably, and that the Garrison was faced with a considerable leadership and management challenge.
CBFHK believed that the challenge which he posed at the Feb 93 meeting of the Hong Kong Steering Committee had been met (ie to strike the delicate balance between finding a smaller but still robust and capable Garrison which met HMG's responsibilities, but at the same time one which had the political and financial backing of HKG and could meet the tasks placed on it by the HKG). That said, and even with the support of HKG, he believed that the DCA remained a difficult issue. HKG would probably have to argue hard against a LEGCO Finance Committee whose appetite for DCA savings
savings was clearly whetted by the 19 Jul 93 announcement of reductions.
The inevitable reprofiling redundancy costs into FY 94/5 will create problems in that year.
6.
the
of
Broadly, however, the community supported plans for drawdown.
The current and projected security
security situation in HK remained excellent, despite political difficulties between London and Peking. At 'grass roots level' public order depended far more on short-term economic performance, where growth remained good. The biggest threat to HK's prosperity (and hence stability) might be signs of failure in the Chinese economy, and the risk of the "boom going bust".
FEW4 (FEW2\STE\CLS\PS\LM)
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CONFIDENTIAL