TNAG-0441-FCO40-506-Visits-of-leading-personalities-of-Hong-Kong-to-UK-1974 — Page 13

CONFIDENTIAL

Positive Points to Make

4.

(a) How is Sir Albert's present tour going?

Background

Sir Albert is the Chairman of the Hong Kong Action Committee

a major social and law and order problem

Against Narcotics

in Hong Kong. He may be expected to talk with knowledge

and concern on the subject. A note on the problem of

narcotics in Hong Kong is attached.

(b)

How does Sir Albert see the present economic and

social situation inside Hong Kong?

Background

For many years, Hong Kong has enjoyed boom conditions.

Until the past year there has also been a steady rise in

real wages averaging about 5.2% per annum. The relatively

stable cost of living has assisted this upward trend of

real wages;

until recent months it has owed a great deal

to China's helpful pricing policy on her food exports to

the Colony. This relatively favourable situation is now

being undermined, particularly by inflation. The Chinese

have been increasing the prices of the food they export.

In the eleven months to November 1973 the general consumer

price index had increased by 21%, largely as a result of the

increases in the retail prices of foodstuffs; but wages in

manufacturing industries had increased by only 11.3% in

the first nine months of 1973. In the six month period up to

September 1973 real wages actually fell by %. The

consumption of most fresh foodstuffs has been declining.

These trends have led to criticism of the increasingly

uneven distribution of Hong Kong's wealth. The gap between

CONFIDENTIAL

/the rich