TNAG-0547-FCO40-642-Diplomatic-reports-from-Sir-Murray-MacLehose--Governor-of-Ho-1975 — Page 19

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CONFIDENTIAL

香港總督府

RECEIVED

REGISTRY N 52

25 MAR 1970

GOVERNMENT HOUSE

HONG KONG

15 March 1975

Sir,

HKKIYS

3

By the end of 1974 the down turn in the

Hong Kong economy and the social pressures generated by

it dominated all other issues here. For this reason

I have delayed this despatch until the outcome of the

Budget for 1975/76 was known.

2.

After the boom years of 1968-73, in 1974

Hong Kong tightened its belt, in 1975 this is being further

tightened and the pinch is hurting. So far the population

has reacted with typical realism and flexibility.

But

the principal problem confronting my government in 1975

will be how to maintain the cohesion, confidence and loyalty

of the population during the period of unfamiliar stringency

which lies ahead.

3.

The problem is all the more difficult to

handle because the impact of world-wide recession, with con-

sequent loss of revenue, has coincided with the first years

of far-reaching plans for social betterment. The latter

are necessary in themselves, and have aroused public

expectation and support, but they have also increased the

Government's demands on the economy.

The problem has been

THE RIGHT HONOURABLE

JAMES CALLAGHAN, M.P.

CONFIDENTIAL

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