CONFIDENTIAL
BACKGROUND
Airport
The Airport Committee met on 18 June. The Chinese agreed to the franchise for Western Harbour Crossing; made positive noises about the Central/Wanchai Reclamation project, but did not agree it at this meeting; and asked for an additional HKG equity injection of HK$18 billion.
Economy
Hong Kong's economic fundamentals remain strong. The economy continued to grow steadily, with GDP growth of 5% in 1992 and 5.5% projected for 1993. A strong re-export
2.
performance and buoyant domestic demand provided the key impetus to this growth. Income per head reached US$13,200 and is poised
to over-take that of the UK. Inflation is around 8% and has been decreasing steadily since April 1991. Unemployment has remained low at around 2%. Hong Kong is the world's 10th largest trader with only one thousandth of the world's population. China is Hong Kong's most important trading partner.
Confidential Financial Dialogue
The last meeting of the Confidential Financial Dialogue was held in Peking on 20 February.
3.
At the next meeting, the Hong Kong Government intend to propose the issue of three-year Exchange Fund Bills to encourage further development of the market.
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CONFIDENTIAL
air.brief.ADM.JRB