TNAG-1169-FCO40-1449-Future-of-Hong-Kong-1982 — Page 33

SECRET : PERSONAL

Foreign and Commonwealth Office

London SW1A 2AH

RJT McLaren Esq CMG Political Adviser

Government Secretariat HONG KONG

Lear Robin

Telephone 01- 233 3184

Your reference

Our reference HKK 040/1

File: 192

Date

8 April 1982

HKK 040/1

//(161

152

FUTURE OF HONG KONG: FINANCIAL IMPLICATIONS

1. Thank you for your letter of 29 March.

162A)

2.

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ible

See (271)

I am glad you were able to have a session with Christopher Mallaby, in spite of the short notice and the brevity of his visit. We in this department are fully in agreement with you about the nature of the problem and were actually pointing this out to the Planning when the Hong Kong visit arose. We thought that it would be particularly useful if Christopher were to see someone on the spot. We are well aware of the dangers referred to in your paragraph 4 and you can rest assured that we shall continue to press home the point whenever the need arises.

3.

While on this subject, I would find it very helpful to have a view on the present degree of disinvestment from Hong Kong in the light of John Bremridge's comments during his visit to Peking (Michael Atkinson's letter of 29 March to me).

TGTA)

4. I should be grateful to know how you see matters standing at present. Lord Shepherd's impression, following his recent visit, is that confidence is more brittle than it was 6 months ago as he recently told Mr Atkins (enclosed copy of his letter of 29 March and Alan Donald's minute of 30 March refer). From time to time we receive other imprecise comments from visitors to the effect that some disinvestment is taking place. But to what extent this may be due to the general recession, oil prices, US interest rates or uncertainty over Hong Kong's future is hard to judge from here.

cc Mr Elliott FED

Nich

RD Clift

Hong Kong and General Department

SECRET

PERSONAL