TOP SECRET
Hong Kong third amongst the trading countries of Asia and number twenty-five in the list of the world's trading countries.
6. Without a substantial home market, Hong Kong's basically industrial economy rests upon the opportunity to trade. It is and always will be very vulnerable in the event of any trade recession or the adoption of more protestionist policies by countries constituting its major markets. Although its growth is in part self-generated it continues to be heavily dependent on outside capital. The Colony is today entirely self-supporting; but it could become a major liability in the event of a world trade recession or of a crisis of confidence involving the cessation or withdrawal of external investment. It would seem that such a liability must inevitably arise as its economy begins to run down
towards the end of the lease in 1997.
annual 7. Measured by exports, the growth rate in the economy has been of
L' the order of 12-14% in recent years. There are no indications at present of a decline in this rate, but it may prove difficult to maintain. Apart from the factors affecting the expansion of its trade noted in paragraph 6 above, Hong Kong's competitive position can be expected to worsen (particularly viz-a-viz other low-cost Asian countries such as Taiwan and Korea) with the progressive introduction of Western concepts of labour legislation, e.g. shorter hours of work, and with steadily rising wage rates. is reasonable to assume however that, notwithstanding the high natural rate of increase and the need to provide employment for a substantial and rapid increase in the size of the working population, living standards could be maintained and improved at a lower rate of growth in the economy.
8. Constitution
It
Hong Kong is a Crown Colony administered by a Governor who is assisted by entirely nominated Executive and Legislative Councils over which the Governor presides.
9. The Governor is required to consult with the Executive Council, save where matters are unimportant or too urgent. He may act contrary to the advice given by the Council but, in such cases, must report fully to the Secretary of State.
10. The power to legislate rests with the Governor "by and with the advice and consent of the Legislative Council". There are the usual reservations to the Crown of the power of disallowance and the power to legislate, with the advice of the Privy Council, "for the peace, order and good government of the Colony".
11.
Because we hold the major part of the Colony on lease and because China regards the whole Colony as Chinese territory to be taken back in due course, we are precluded from treating it as a candidate for self-government or independence.
We are
TOP SECRET
/inhibited
No comments yet.
Private notes are available after approval.