TNAG-1264-FCO40-1610-Future-of-Hong-Kong-confidence-in-Hong-Kong-1983 — Page 8

10. INVESTMENT.

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THE PROPERTY MARKET HAS SHOWN NO SIGN OF REVIVAL. FOR 1983 AS A

WHOLE, PRIVATE SECTOR EXPENDITURE ON BUILDING AND CONSTRUCTION

IS FORECAST TO DECLINE BY 15 PER CENT IN REAL TERMS.

11. LITTLE INVESTMENT IN PLANT, MACHINERY AND EQUIPMENT IS TAKING

PLACE AND THE LATEST FORECAST IS FOR ZERO GROWTH IN 1983. BUT THE

BUOYANCY OF EXPORT DEMAND PRESENTLY BEING EXPERIENCED WILL EN-

COURAGE MANUFACTURERS AT LEAST TO MAINTAIN ASSETS.

12. EMPLOYMENT.

UNEMPLOYMENT WAS 4.4 PER CENT IN THE SECOND QUARTER AND FELL TO

3.8 PER CENT IN THE THIRD. EMPLOYMENT IN THE CONSTRUCTION INDUSTRY

FELL BY 12 PER CENT IN THE 12 MONTHS TO THE END OF SEPTEMBER.

13. PRESS AND OTHER INDICATORS OF PUBLIC OPINION.

YOU ALREADY RECEIVE DAILY AND FORTNIGHTLY SUMMARIES. EDITORIAL

COMMENT AS WELL AS THE VIEWS OF INDIVIDUALS AND PRESSURE GROUPS

INDICATE THAT THE WEIGHT OF CHINESE PROPAGANDA EFFORTS IS HAVING A CUMULATIVE EFFECT. MANY WHO KNOW THEY CANNOT INFLUENCE THE

COURSE OF THE FUTURE ARE RESIGNED ABOUT IT EVEN IF THERE IS AN

UNDERLYING MISTRUST OF CHINESE GUARANTEES. ALTHOUGH THE ATMOS-

PHERICS SURROUNDING THE TALKS HAVE IMPROVED, THIS HAS NOT RESULTED IN ANY MARKED INCREASE IN OPTIMISM REGARDING THEIR ULTIMATE

OUTCOME. THE CHINESE HAVE CONTINUED TO HAMMER HOME THE MESSAGE

THAT HONG KONG'S FUTURE CONSTITUTIONAL ARRANGEMENTS ARE NOT A

MATTER FOR THE TALKS BUT A MATTER FOR CHINA TO DETERMINE IN

CONSULTATION WITH THE PEOPLE OF HONG KONG.

14. AMONGST PROFESSIONAL PEOPLE, THERE ARE SOME (E.G. THE OBSERVERS) WHO NOW BELIEVE THAT SOMETHING WORKABLE COULD BE CREATED ON THE BASIS OF CHINESE PLANS. THERE ARE OTHERS, EG. THE YOUNG PRO- FESSIONALS AND SOME ACADEMICS WHO BELIEVE THAT WITHOUT LINKS OF AUTHORITY TO THE UK, THE CHINESE PLAN AS REPORTED WOULD NOT WORK. WE HAVE NO EVIDENCE TO INDICATE HOW THIS BALANCE HAS MOVED IN RECENT MONTHS THOUGH THE VIEWS OF THE FORMER MAY GAIN SOME SUPPORT IN THE NEXT FEW MONTHS.

15. THE TALKS.

LESS PUBLIC INTEREST WAS DISPLAYED IN THE LAST ROUND OF TALKS. THIS WAS IN PART DUE TO A CALMER ATMOSPHERE, BUT IS ALSO INDICATIVE OF A GROWING FEELING THAT AS THE CHINESE APPEAR TO BE DICTATING THE TERMS, THE TALKS ARE IRRELEVANT. THE FRUSTRATION AND ANXIETY WHICH THIS FEELING HAS ENGENDERED AMONGST INDEPENDENT MINDED PEOPLE TENDS TO MAKE THEM CONFUSE BRITAIN'S APPARENT IMABILITY TO DELIVER SATISFACTORY ARRANGEMENTS WITH INSUFFICIENT DETER-

MINATION ON BRITAIN'S PART TO TRY. 1

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