TNAG-1237-FCO40-1550-Future-of-Hong-Kong-1983 — Page 133

CONFIDENTIAL

HKK A0/1

IRENEO YA SEA5191 No. $1 14 APR 1983

USTRY

en

Governor M1514

Record of a meeting between HE the Governor and UMELCO Members held at the UMELCO ChamberS at 1200 on Friday, 18 March 1983

Present: Governor

Chief Secretary

Secretary (General Duties)

Political Adviser

UMELCO Members

Welcoming the Governor, Sir S Y Chung recalled

that before his recent visit to London the Governor

had offered to brief UMELCO Members about his talks there. The Governor said that it had not been a coincidence that he and Sir Percy Cradock had been in London at the same time. The Prime Minister and the Foreign Secretary had felt that the time had come for a review of the position reached in the talks and wished both the Ambassador and the Governor to be present: while the Governor had been to London twice since the Prime Minister's visit to Peking, the Prime Minister had not seen Sir Percy Cradock since then.

2.

The Governor explained that he had given the Prime Minister his assessment of the state of opinion in Hong

Kong.

He had said that the atmosphere was calmer than it had been a few months previously. People had become familiar with the propaganda themes being put about by the Chinese; the economic situation had become more settled and the Budget had been well received; the prospects for the US

and there was a little economy looked a little brighter;

more optimism in the property and manufacturing sectors. The situation was nonetheless still volatile, and could easily be disturbed by new developments such as an announcement

CONFIDENTIAL

from Peking. ../

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