TNAG-1167-FCO40-1447-Future-of-Hong-Kong-1982 — Page 124

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GRS 175

CONFIDENTIAL

FM HONG KONG 110145Z FEBRUARY 1982

TO PRIORITY F C O

TELEGRAM NUMBER 117 OF 11 FEBRUARY

INFO ROUTINE PEKING

YOUR TELNO 79: FUTURE OF HONG KONG

нки очол

11 FEB:922

1. THE STORY REFERRED TO IN YOUR TUR APPEARED IN THE CHINESE-LANGUAGE ORIENTAL DAILY NEWS ON 8 FEBRUARY AND WAS TAKEN UP BY OTHER CHINESE NEWSPAPERS YESTERDAY. THE MAIN BURDEN OF THE REPORT, FOR WHICH NO SOURCE WAS GIVEN, WAS THAT THE CHINESE HAD DRAWN UP AN OUTLINE PLAN WHEREBY THE NEW TERRITORIES WOULD BE GOVERNED BY A MERCENARY BRITISH ADMINISTRATION AS A SPECIAL ECONOMIC ZONE. A PARALLEL WAS DRAWN WITH PLANS FOR THE DEVELOPMENT OF A NEW TOWN

IN SHENZHEN BY HOPEWELL HOLDINGS.

12! Pas 12/2

2. FANCIFUL REPORTS OF THIS KIND ARE COMMON ENOUGH. WHILE SOME OF THE PRESS HAVE SIGGESTED THAT THIS PARTICULAR REPORT MIGHT HAVE CONTRIBUTED TO THE FALL IN THE HANG SENG INDEX ON 8 FEBRUARY (WHICH CONTINUED YESTERDAY), ITS INFLUENCE, IF ANY, IS UNLIKELY TO HAVE BEEN MORE THAN MARGINAL. THE MORE SIGNIFICANT FACTORS WERE CONCERN AT PRESIDENT REAGAN'S BUDGET PROPOSALS, AND THE PROSPECT OF HIGH AND RISING U S INTEREST RATES, AND UNEASE ABOUT THE STATE OF THE LOCAL PROPERTY MARKET.

MACLEHOSE

LIMITED

HK & GD FED PS/LPS PS/PUS

MR DONALD

(THIS TELEGRAM WAS NOT ADVANCED]

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