TNAG-0461-FCO40-526-Exchange-of-newsletters-between-Foreign-and-Commonwealth-Off-1974 — Page 39

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year. The share index is down to 425 compared with that heady (crazy) 1,775 in March; the daily turnover is sluggish to fitful and money is tight (partly because much of it is locked up in shares waiting for them to climb up again) Property values are holding up better than shares partly because this is seen, from past experience, as the best investment base for "take off" when the economy regains momentum - but even so there have been some reductions in office and residential prices (although they are still high). The cost of living has risen sharply during the year (about 22% overall on the official index but it feels more in the shops) and there is pressure for more Government control of basic costs (rents, now controlled, and food) and wage increases (the wage index has lagged behind the cost of living). So far the fuel crisis has not noticeably affected Hong Kong - the save fuel campaign has taken some of the glitter out of the city after 10.30 p.m. but not had any other visible effects and has not yet saved much; but there is a sense of problems not far around the corner. Generally the mood of approach to 1974 is a mixture of apprehension and caution, businessmen talk of "consolidation" rather than expansion; living on trade they don't expect (tho' they might hope) to escape the economic gale blowing round the world, don't know how much they might be rocked, but persuade themselves that as in the past they will come out right side up in the end.

21. As Sir Lawrence Kadoorie said to the assembled 170 guests at his traditional New Year's Day lunch before, sadly, he was permitted to announce his highly deserved and very much applauded knighthood -"There is a difficult time ahead of us all. But there will be some bright moments also. Let us make the best of them and survive the rest."

KUNG HEI FAT CHOY

As ever.

Tom

T W Aston

Senior British Trade Commissioner

TWA: dh

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Every effort is made to ensure that the information given herein is accurate, but no legal responsibility is accepted for any errors or omissions in that information and no responsibility is accepted in regard to the standing of any firms, companies or individuals mentioned.