12
The Governor asked about the origins of Tiananmen Square.
Mrs Chan summed up the main influences as a spontaneous outburst of protest against corruption in government and inflation.
13
she could
In general Mrs Chan expressed herself an optimist: not see that China would want to adopt a stance of permanent
confrontation up to 1997.
14 The Governor asked about the dangers of the spread of
corruption in Hong Kong. Mrs Chan explained that the risk was
heightened by the increase in the volume of business between Hong Kong Chinese entrepreneurs and China. There was a great deal
of corruption involved, bribes were getting larger and the culture
was beginning to take hold in Hong Kong. It had taken the
Hong Kong government 20 years to stamp out institutionalised corruption. They did not want to see it re-appearing in the Hong Kong Civil Service, but the danger signs were there.
cleanest Civil Service in Asia was Britain's best legacy.
The
He
15 Turning to the economy Mrs Chan noted that Hong Kong was
performing well. She asked the Governor whether he thought the
flood of US money into the Hong Kong stock market would dry up.
took the view that it was not only US money and it was going not
only into Hong Kong but into other rapidly growing countries in
Asia. It was a function of the recession in the US and Europe and
represented funds looking for the most profitable, because fastest growing, centres. As profitable investment opportunities picked up
elsewhere he expected the flow to slow down, but it reflected to a
large extent a natural diversification of portfolios.
16 Mrs Chan expressed surprise that investors seemed to be taking
no account of political uncertainties. The Governor thought that
to some extent this depended on Chinese reactions to a breakdown in
the political talks. But it was possible to conclude that economic
growth, particularly in southern China where most of the Hong Kong
China-plays were located, would continue.
17
In conclusion the Governor referred to the successful
establishment of the Hong Kong Monetary Authority. He said he was