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CONFIDENTIAL
Subject
It became the prime aim of the Hong Kong Government to sustain confidence and the Governor's speech to Legislative Council in October expressed the Government's determination to invest vigorously in the future of the territory.
By the spring of this year the atmosphere had become calmer: but the underlying volatility and uncertainty remains.
The Chinese are continuing their efforts to gain acceptance of their plans through direct contacts with the Hong Kong population.
In Hong Kong/UK relations there was continued bitterness over the Nationality Act, and concern over student fees and textile quotas. The key issues now are to demonstrate HMG's continuing commitment to the territory and to reassure Unofficials on their involvement in the negotiations.
It was nevertheless a year of achievement too with progress in housing, tertiary eudcation, public works projects, the successful conduct of district and urban elections, and the passage of major legislation.
The agenda for the coming year will be a full one : quite apart from the issues of the future and the economy. The affairs of the territory will have to be managed with increasing regard for the demands for more participation in government on the part of an increasingly skilled and
articulate population.
CONFIDENTIAL
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