TNAG-1013-FCO40-1263-Hong-Kong-annual-review-for-1980-1981 — Page 21

10

Mr Donald

CONFIDENTIAL

акканц

RELOVED IN REGISTRY NO. 51

23 FER

DECK OFFIDER INDEX

! RECISTRY

PA

Action Takon

3

HONG KONG ANNUAL REVIEW

1.

2.

I attach the Hong Kong Annual Review for 1980.

The Review records a surprisingly good year for Hong Kong in the light of world economic and other problems. Relations with China developed well. Illegal immigration took over from Vietnamese refugees as the major issue. It appeared to have been largely solved by the end of the year. The much publicised take-over moves against British 'Hongs' by Hong Kong Chinese are well put in perspective in the Review.

3.

However, the Governor sounds a cautionary note on the economy. Increased rents and the drop in real wages at a time of unprecendented inflation are beginning to offset Hong Kong's affluence and the bite of recession is likely to be felt more keenly this year.

4.

The Governor draws attention to strains in UK/Hong Kong relations, particularly over student fees and the Nationality Bill. The latter has caused a renewed stir in Hong Kong in the past 2 weeks. Such issues will continue to cause problems in 1981.

The renegotiation of the Multi-Fibre Arrangement is likely to add a fresh point of friction.

I am arranging for the Review to be printed in the General Series. I have thanked Sir M MacLehose.

5.

3 February 1981

сс

Private Secretary

PS/LPS

PS/Mr Blaker

PS/PUS

Sir E Youde

FED

Slip

р

R D Clift

Hong Kong and General Department

How right the

A concise account. Geromar was about the impact of the

Natimelity Bill!

CONFIDENTIAL

D23⁄41/2 Hagd

Aped 19/2