TOP SECRET
Page 174
Internal Policies
Page 174
17. On the above assumptions, the Secretary of State will continue to be constitutionally responsible for Hong Kong and it is highly likely that the Colony's
affairs will continue to be a matter of considerable
concern to Parliament and in political circles more generally. Moreover, the Hong Kong Government's internal policies will need to take account of the eventual approach that Her Majesty's Government will
have to make to the Chinese in due course. Our
negotiating hand at that time will be greatly strengthened if Hong Kong is a stable and thriving community with a greater degree of public participation in the running of its affairs than at present. thus constitutionally incumbent on Her Majesty's Government, and in our own interests, to monitor (and where necessary to promote) policies to that end.
18. This section of the paper therefore attempts:
(a) to analyse the Hong Kong Government's past performance and future plans for economic, social and political development;
(b) to consider whether there are any deficiencies
in those plans; and
It is
(c) to suggest possible means by which these
can be remedied.
Present Policies
Fiscal
19.
Hong Kong's post-war development, against a background of a seven-fold increase in the population political uncertainty and a total absence of natural resources, has been remarkable. In the period 1945-71 (and particularly after 1961) the Colony achieved a remarkably high rate of growth with steadily increasing real wages per head (about 5% per annum), full employment, a sound balance of payments and relatively little inflation. This success was the result of
five principal factors:
7386 D073815 140M 5/74 Cr.P.C. Gp.839/3
NOTHING TO BE WRITTEN IN THIS MARGIN
Page 174
/(i)
Page 174
10
Page 174
TOP SECRET