TNAG-0393-FCO40-439-Diplomatic-reports-from-Sir-Murray-MacLehose--Governor-of-Ho-1974 — Page 31

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FOREIGN AND COMMONWEALTH OFFICE

HKK 13/16

DIPLOMATIC REPORT No. 228/73

Foreign and Commonwealth Office (Secret) and Whitehall (Secret) Distribution

HONG KONG 17 April, 1973

The Secretary of State for Foreign and Commonwealth Affairs to The Governor of Hong Kong

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Sir,

Foreign and Commonwealth Office,

17 April, 1973.

I have the honour to refer to your despatch of 1 January, 1973,* containing your report on Hong Kong for the previous year. I fully agree with the general lines of policy set out in that despatch, and I commend the vigour with which you personally and your staff are, despite the difficulties, carrying out your plans for the development of Hong Kong.

2. I also agree that the conjunction of continued prosperity in Hong Kong with the present period of better relations with the Chinese Government makes this the right moment to push forward the development of Hong Kong as a place where the mainly Chinese population will wish to live and work; and that the Hong Kong Government must be a Government in a hurry if the necessary development is to be completed within a reasonable time scale.

3. You write of the problems of trade and finance and of the degree to which relations with Britain are adversely affected by these and other difficulties. I accept that these problems, though relatively few, are important, and can lead to a sense of insecurity. There is, however, a new awareness, on both sides, of a community of interest between Britain and Hong Kong. It is the job of the servants of both Governments to foster this development, and they are doing so.

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4. A major concern of your Government is to associate the people with the work of development within the existing constitutional framework. The Keep Hong Kong Clean" campaign is a successful early example of this approach, for which credit is due to all concerned. Your Government's social programme will also both generate and require increasing public support and involvement.

5. To achieve this development, however, you have three main requirements; a healthy economy, an efficient Government machine, and a framework of law and order. The economy of Hong Kong has always been based on confidence and hard work. The recent activity in the Hong Kong stock exchanges and the associated sharp rises in land prices and rents have, however, disturbed the pattern of orderly economic development. You are well aware of the risks both of over-confidence and of recession. Your Government has taken and is taking action to control the situation, but great care will continue to be needed as well as a willingness to act in time to forestall unhealthy developments.

6. You are also tackling, with the help of your consultants, the reorganisation of the Government machine to meet the needs of Hong Kong today.

* DR 176 “Hong Kong: Annual Review for 1972 ".

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20893-228 139475-24