TNAG-0610-FCO40-758-Hong-Kong-annual-review-for-1976-1977 — Page 13

CONFIDENTIAL

FOREIGN AND COMMONWEALTH OFFICE

HKK 014/2

DIPLOMATIC REPORT No. 84/77

FCO (S) WHI (S) Distribution

HONG KONG: ANNUAL REVIEW FOR 1976

The Governor of Hong Kong to the

HONG KONG 1 January, 1977

Secretary of State for Foreign and Commonwealth Affairs

SUMMARY

1976 saw an economic recovery in Hong Kong of remarkable speed, whose benefits were widely distributed (paragraphs 1-2).

2. Against this background of prosperity Hong Kong took calmly Mao's death. Though policy to Hong Kong is not at issue new uncertainties now exist. The policies and programmes of the Hong Kong Government are already designed to strengthen the Colony against an uncertain future, but Mao's death adds a new urgency (paragraph 3).

3. A review was undertaken of policy to China in respect of Hong Kong and of the domestic policies of the Hong Kong Govern- ment. The latter should provide reasonable answers to reasonable criticism, and will achieve sound social conditions in the Colony by the early '80s (paragraphs 4–7).

4. During the year the composition of the Legislative Council was changed; the target was announced for labour legislation of com- parability with Asian neighbours within five years; the fight against crime and corruption made visible progress (paragraph 8).

5. Towards the end of the year a strong back-lash developed against the announced programme of labour reform (paragraph 9).

6. Dislike and suspicion of the Colony in some quarters in the UK remains disturbing. The best answer would be an increase in British exports. Efforts are being made to achieve this (paragraph 10).

7. 1977 will be a particularly busy year, with a heavy pro- gramme of legislation and a thorough review of the social welfare system to complete (paragraph 11).

(Confidential) Sir,

Hong Kong,

1 January, 1977.

In 1974 economic depression struck; in 1975 the depression deepened and there was acute anxiety, but the bottom was reached, hope revived and by the end of the year progress was resumed; but in 1976 Hong Kong showed its paces in a recovery of remarkable speed, whose benefits were widely distributed. By the end of the year in terms of employment, disposable real incomes, confidence, investment and Government programmes, Hong Kong was back on the course from which it had been knocked by the world recession. The prospect is now for continuing

CONFIDENTIAL

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