CONFIDENTIAL

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MDHIAN 7362

21. Debate on most local issues has been muted as a result of the summer holidays. The principal exception has been the difficulties

our localisation policy for the civil service.

over our

The Civil Service

22. The community was initially upset at HKG's reversal of its Localisation policy. Public opinion, however, is now coming to terms with the new approach:

The community, on reflection, has recognised that Hong Kong's broad international mix of professional and other talent is an important component of its

success.

Many commentators have recognised that HKG's unwillingness to flout the Bill of Rights sets an important standard for a future administration.

Many union representatives (including the disciplined services) have stood aside from the debate. The most vocal (including representatives of local crown counsel) have overplayed their hand.

23. The appointment of Anson CHAN as Chief Secretary Designate has been greeted with widespread approval. She is regarded as an excellent successor to Sir David Ford, and the announcement has underlined the sincerity of our commitment to localisation. In my Policy Address, I intend to reassure the community further of our commitment to making good the principle of Hong Kong people ruling Hong Kong before we get to 1997.

CORRUPTION

24. I also intend to take the opportunity afforded by my Policy Address to tackle one of Hong Kong's greatest anxieties about the transition: the growth of corruption. An SCMP poll published on 17 September showed that 78 per cent of respondents feared that the future government of the SAR would be corrupt. Already, public complaints to the ICAC this year are 44 per cent higher than in 1993. The community is increasingly concerned about PRC corruption infecting the business sector in particular. I have decided, therefore, to lead a major campaign to raise business ethics with

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CONFIDENTIAL

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