CONFIDENTIAL
5. I have referred to our responsibility for the interests of Hong Kong and of all those who have chosen to live and work there. We take that seriously. Ministers have often declared HMG's commitment to Hong Kong. I should like to repeat it here. It signifies our determination to seek a settlement which will genuinely meet Hong Kong's interests and maintain confidence there.
6. As the negotiations proceed we maintain a continuous process of consultation
through many channels, both official and
unofficial.
We are in .close touch through the Governor, with Hong Kong's Executive Council. Sir Edward Youde and the Unofficial members of the Council again visited London from 6-8 October for discussions with the Prime Minister and other Ministers. The discussions were conducted against a background of continuing mutual trust. They resulted in a valuable exchange of views and complete understanding on the issues involved. HMG are grateful for the time and effort devoted by members of EXCO to these problems.
7. There are bound to be feelings of uncertainty in Hong Kong about what the future holds in store. We are deeply conscious of these concerns. Some have suggested that we might alleviate them by saying more in public about the content of the negotiations. We do not believe that this would be right. By mutual agreement with the Chinese Government, the talks are confidential. The complex issues involved must be thought through closely and constructively. We intend, in detailed discussions with the Chinese Government to continue to look at the Hong, Kong question from every angle. believe that the correct place to do so, without prejudice to the final outcome, is at the Conference table.
We
8. The House will be aware that there have been significant fluctuations in the Hong Kong stock market and in the Hong Kong dollar exchange rate. Of course uncertainty about the future has contributed significantly. But we must not lose sight of other, more widely applicable factors such as the world recession, the strength worldwide of the US dollar and high interntional interest rates. There is an underlying strength in the Hong Kong economy. This is reflected in indicators such as improved export performance and in full order books. Hong Kong's domestic export growth
CONFIDENTIAL
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