CONFIDENTIAL
6.
Over and above these three impressions was a much vaguer, but perhaps more worrying one, of a general feeling of uneasiness throughout the community. We found, as have other recent visitors, people rather edgy. The uneasiness takes different forms at different levels. Until the Governor's return from the UK the prime preoccupation of the Unofficials and Senior officials was the British Nationality Bill. At that time there was a distinct antipathy towards HMG, and the FCO in particular, which was reflected in the way in which Sir S Y Chung, whom I know well, cut me completely dead when we met. However, after the Governor's return and what the Unofficials regarded as their victory, the atmosphere changed radically. Indeed the next time I saw Sir S Y, he welcomed
me very warmly.
7. In the middle classes as well as amongst the Unofficials there is also of course the concern about the future of Hong Kong in 1997. There is a very strong belief that HMG has not pushed the Chinese hard enough to come up with a bankable assurance on the future. We need now to see what the effect of Deng Xiao-ping's renewed reassurances will be. But it will not be logically possible for people in Hong Kong to say that we have not tried hard enough though they will probably do so. Another cause of general uneasiness throughout the territory is inflation which is now running at an officially estimated 15% per annum which, much to the horror of many people in Hong Kong, is now greater than that in the United Kingdom. Inflation at this level is something which people in Hong Kong are not used to and which has hurt many of them (that is they have not become as better off as they expected! Against this, the vastly increased wealth of many people is quite remarkable).
8.
There are also growing concerns amongst particular sections of the community about the MacLennan case which has had a very bad effect on morale at senior levels in the Police Force; about intended increases in bus fares and the possible need for water rationing later in the year if the rains continue to fail.
9.
What does all this add up to? It does not in my opinion amount to a serious situation which could readily lead to riots and civil disturbances. However, the seeds for these are there and the situation needs to be watched very carefully for potentially explosive issues.
C.
9 April 1981
P J Williamson
Hong Kong & General Department
CONFIDENTIAL
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