TNAG-1168-FCO40-1448-Future-of-Hong-Kong-1982 — Page 65

A

706

CODE 18-77

SS 8/78

HKK 040/1

112

Reference

SECRET

Mi2/3 I have minkered with the drafts. Presumably Mkallaby

Mr Morris

Mr Williamson

Mr McQuad

Mr Gift

will Celephone

get

4. Mcharen. but we now have to

& Rexallab menage through Mikk oyo!!

I think it's best wi

weighing in

I Leive a

with aw

wanded the chaupts

BB, brews

cordingly

laby.

beford

iPho2313

FUTURE OF HONG KONG AND POSSIBLE SLIDE IN CONFIDENCE

1. Please see Mr Morris' minute below.

2.

(106A

Since this minute was written, Mr Mallaby has minuted again to Mr Clift, reiterating his concern over the specifically financial aspects of a slide in confidence in Hong Kong., While these are not perhaps of primary importance, the possibility of a financial crisis and means of averting it most obviously considered. A failure of the banking system would both follow from and accelerate a loss of business confidence, and would in addition have grave international repercussions. I do not know what plans the Hong Kong

Government may already have, nor am I sure what sort of contingency plans would be of use, but prima facie Mr Mallaby's worry about over-reliance on the Hong Kong and Shanghai Bank seems justified, and worth taking up with the Political Adviser. I attach a draft minute from Mr Clift to Mr Jay of Planning Staff, and a draft teleletter from Mr Clift to Mr McLaren.

See

123

11 March 1982

2.9.Elga 5. Elga

C G Edgar

prasas

Just because other dren wit have to have Suggestion, let aloue

be taber

We almue mines,

سما

a

thing

Central, Mor Kong

Patric knowledge of

to set one my momed indication of east of confidence

Shangham Bart.

The Honglong

+

't

financial affairs beltas

ham mort and it is not for

to unite suche

the Hongkong Awerment manages

fundamental criticisan.

Jurčki

1573.82.

SECRET