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Section V: Internal Policies
7.
This section is a complete redraft of Section IV in our Paper, though a number of our ideas find a place. One major difference is the ommission of any reference to the possibility of raising the level of public expenditure to 25% of GDP. It is also stated that a main requirement is not to change the "financial characteristics" of Hong Kong.
Section VI: Britain and Hong Kong
8. This is a considerably amended version of Section V in our Paper, though, again, it contains some of our ideas. (Paragraph 35 is identical with paragraph 32 in our Paper, except for the last four words.) There is no reference to senior officials being resistant to social change, which was contained in paragraph 27 of our Paper (paragraph 3 of the Governor's letter to Mr O'Keeffe refers).
Annex A: Signals by which Chinese attitudes to Hong Kong can be assessed
9. Hong Kong have no comments.
Annex B:
Alternative futures for Hong Kong
10. Hong Kong have no comments.
Annex C: Internal Policies of the Hong Kong Government
11. Paragraph 2: the last two sentences are a redraft. Paragraph 3: the reference, in our Paper, to Hong Kong's
governmental institutions being inappropriate to an urban industrial
environment has been ommitted. The last three sentences are new. Paragraph 4: there is no mention of regressive taxation in the first sentence. The passage beginning "On the other hand, it is important
to the end of the paragraph is new.
that
Paragraph 5: the reference in the fourth sentence to local borrowing and the remainder of this paragraph are new. The last sentence is to be particularly noted.
Paragraph 6: this is a redraft which omits two important statements in our version (paragraph 7 in our Paper which mentioned the free port status of Hong Kong has been omitted).
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