TNAG-1250-FCO40-1564-Press-reports-on-the-future-of-Hong-Kong-1983 — Page 17

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3. THE WEN WEI PO ALSO CARRIED A LENGTHY ARTICLE BY THE DIRECTOR

OF THE HONG KONG AND MACAU RESEARCH CENTRE AT THE GUANGDONG

ACADEMY OF SOCIAL SCIENCES, GU NIANLIANG. GU ARGUED THAT THE

FALL IN THE VALUE OF THE HONG KONG DOLLAR WAS DUE TO INTERNAL

ECONOMIC FACTORS AND NOT TO THE 1997 ISSUE. HONG KONG'S TRADE

DEFICIT HAD BEEN INCREADING RAPIDLY: THE TRADE DEFICIT HAD

TRADITIONALLY BEEN COMPENSATED BY FUNDS FROM VIETNAM (DURING

THE VIETNAM WAR) AND FROM THE CHINESE COMMUNITY IN INDONESIA

WHEN THEY WERE BEING PERSECUTED, (SIC), BUT THIS INFLOW HAD NOW

CEASED. THE SECOND MAJOR FACTOR WAS THE UN-HEALTHY FINANCIAL

MANAGEMENT SYSTEM IN HONG KONG: THE ABSENCE OF A CENTRAL BANK

MEANT THAT THE MONEY SUPPLY, INTEREST RATES AND THE OPERATIE

OF THE ABNKING SYSTEM WERE NOT PROPERLY REGULATED.

4. MOST PAPERS PICKED UP AN NCNA (PEKING) DESPATCH ON

SIR P. CRADOCK'S MEETING YESTERDAY WITH ZHAO ZIYANG. THERE

WAS NO INDICATION IN THIS OR OTHER AGENCY REPORTS OF THE CONTENT

OF THE DISCUSSION.

YOUDE

FUTURE OF HONG KONG

TARMUSI

ED

ED/PLANNING STAFF

HD/PUSD

D/ED/PUSD(MR FLOWER)

RESEARCH DEPT(HR WALKER)

LEGAL ADVISER (SIR IAN SINCLAIR)

PS

PS/LADY YOUNG

PSAR LUCE

COPIES TO: (VIA DISTR. ROOM)

BUCKINGHAM PALACE

PS/LORD PRESIDENT OF THE COUNCIL

PS/HOME SECRETARY

PS/CHANCELLOR OF THE EXCEQUER

PS/LORD PRIVY SEAL

PS/SECRETARY FOR TRADE AND

INDUSTRY

COPIES TO:

(VIA ADP.)

MR ROBERTS

ME BURROWS

NEWS DEPT

LEGAL ADVISERS

MR COLES NO 10 DOWNING ST

PS/PUS

SIR J BULLARD

MR GIFF AFD

HR DONALD

MR #RIGHT

SIR C TICKELL

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SIR A PARSONS

MR MARTIN

ASSESSMENT STAFF

HR GOODALL

CABINET OFFICE

CABINET OFFICE

HR (BRENKAN ..

PS/S OF S FOR DEFENCE PS/ATTORNEY GENERAL