CONFIDENTIAL
MDH
067705
N 1451
FAILURE TO RESOLVE THE DISPUTE OVER CONTAINER TERMINAL 9 WAS
BALANCED BY GENERAL SATISFACTION WITH THE APPROVED LAND SALES TARGET (127.8 HECTARES).
13. A SIMILAR PATTERN HAS EMERGED IN OTHER AREAS. AN NCNA
OFFICIAL IN HONG KONG WARNED HKG OFFICIALS THAT THEIR LONG-TERM
CAREER PROSPECTS COULD BE DAMAGED BY TOO MUCH ENTHUSIASM FOR HKG POLICIES. THIS WAS OFFSET ON 16 MAY, WHEN LU PING, DIRECTOR OF THE HONG KONG MACAO AFFAIRS OFFICE, GAVE A STRONGLY-WORDED REASSURANCE TO THE LOCAL MEDIA THAT THERE WOULD BE NO POST-1997 REPRISALS AGAINST OFFICIALS (INCLUDING POLICE OFFICERS) AND THAT THE HONG KONG LEGAL SYSTEM WOULD REMAIN INTACT.
THE ECONOMY: A TRUMP CARD
14. WHILE INCREASED POLITICAL REALISM AND MATURITY HAVE CONTRIBUTED A GREAT DEAL TO THE TERRITORY'S RESILIENCE IN THE FACE OF SUSTAINED CPG HOSTILITY, A STRONG ECONOMIC PERFORMANCE HAS BEEN NO LESS IMPORTANT. VIGOROUS ECONOMIC GROWTH HAS HELPED TO COUNTER THE BUSINESS LOBBY ANXIOUS TO INGRATIATE ITSELF WITH PEKING BY PREDICTING THAT THE POLITICAL IMPASSE WOULD CAUSE BUSINESS CONFIDENCE TO COLLAPSE. THE BOOM HAS REINFORCED PUBLIC CONFIDENCE IN HKG'S ABILITY TO MANAGE A THRIVING COMMUNITY.
15. THE BOOM'S MOST VISIBLE MANIFESTATION IS THE HANG SENG INDEX. ITS ASTONISHING RESILIENCE SEEMS TO REFLECT A REFUSAL BY INVESTORS TO FOCUS MORE THAN BRIEFLY ON ANYTHING BUT THE MOST PROMISING PORTENTS. THE INDEX BROKE THE 7000 BARRIER ON MAY 12, REACHING A RECORD HIGH 40 PER CENT ABOVE ITS PRE-CHRISTMAS LOW. IT RECORDED A NEW HEIGHT ON 18 MAY OF 7149 WITH AN ALL TIME RECORD TURNOVER OF HKD8.1 BILLION.
16. BUOYANT SHARE PRICES ARE BASED ON MORE THAN EBULLIENT EXPECTATIONS ABOUT THE TERRITORY'S ABILITY TO WEATHER CURRENT POLITICAL STORMS AND PROFIT FROM FUTURE PRC ECONOMIC EXPANSION. THE RISE IN THE INDEX ALSO STEMS FROM THE BUSINESS RESULTS CURRENTLY BEING ACHIEVED.
17. THESE START WITH AN ANNUAL RATE OF REAL GROWTH IN GDP OF FIVE PER CENT, WHICH IS EXPECTED TO CONTINUE TILL 1997 AT LEAST. WITH THIS PACE OF EXPANSION, THE 1993 BUDGET WAS ABLE TO FUND MAJOR IMPROVEMENTS TO THE SOCIAL SERVICES: EARMARK SUBSTANTIAL INVESTMENTS IN THE INFRASTRUCTURE (ESPECIALLY TO FACILITATE PRC TRADE): REDUCE PERSONAL TAXATION: AND STILL FORECAST AMPLE
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