inevitably fallen with the combination of the recession and inflation. However, inflation was now virtually nil in Hong Kong and the Colony was well poised to benefit from the up-turn in trade which now seemed to be developing. The net result would probably be of great benefit to the workforce although there had been some very anxious moments during the recession.
7.
Mr Mikardo said he would like to return to the question of elections to the Legislative Council: was there no possibility of, at least, a partly elected membership? Sir Murray MacLehose replied that the problem was that it would be impossible to exclude pro-KMT candidates and the election of any such candidates would cause real difficulties with Peking. Speaking generally, he said the dependence of Hong Kong on China's goodwill was perhaps less well recognised in the United Kingdom than it was in the Colony: there was, for instance, hardly any support in Hong Kong for an elective system among the Chinese population who well understood the dangers of an adverse Chinese reaction.
Hong Kong & Indian Ocean Department
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