TNAG-0465-FCO40-530-Entitlement-of-Hong-Kong-to-EEC-Generalised-Scheme-of-Prefer-1974 — Page 3

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CONFI FEMINAL,

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EFFECTS OF THE RECESSION ON HONG KONG AND IMPLICATIONS FOR THE BUDGET AND SOCIAL PROGRAMME

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34

HKK 5/43

1.

The underlying situation is described in the Governor's 16 October speech to LegCo.

2.

A paper on the Hong Kong economy is attached and also a separate paper on the social programme. The economic slow-dour. comes at a particularly difficult time for the Governor's social programme which was launched at the end of 1972 and is not yet properly under way. His purpose in his talks with Lord Goronwy-Roberts will be to examine how this programme can be kept going; and the implications of pressure in the United Kingdom for faster progress, set against the difficulty of paying for it.

3. The most that the UK can do directly to help the Hong Kong economy is to assist in widening the market for Hong Kong's exports, particularly in the EEC, and particularly in textiles. paper on the current problems is attached. The question of Hong Kong's ability to pay is also relevant to the Defence Review (see separate brief).

HKK 6/598!!!

(1974)

Hong Kong & Indian Ocean Dept. 13 December 1974

LAST ENTRY.