TNAG-1267-FCO40-1616-Economic-situation-in-Hong-Kong-1983 — Page 302

If Kad

SECRET

tch Econy fill. . w/ 316

1. If byth fi. Ge Enter kere Mr. Morris M. Clift on 7/7/83

(6)

Mr Wright

CONFIDENCE IN HONG KONG

36

29

FROM

DATE:

Cc:

while

A E Donald

28 June 1983

HKD✓

Mr Flower, PUSD Mr Chift, PS/PUS

1. I have seen your minute of 23 June to Mr Flower about

the JIC's wish to write a paper on 'confidence in the economy'

of Hong Kong.

2. As you know, neither the Governor of Hong Kong nor Hong

Kong Department believe that any useful purpose would be served

by the JIC producing a paper on this topic. I fully support

this position for the following reasons:-

(a) The Hong Kong Government has de facto autonomy in

running economic and commercial affairs in Hong

Kong. This must be what the Governor meant when

said in his recent telegram that there was no

independent information or expertise available in

London; in effect, neither the Treasury nor the

Bank of England have detailed information on how

Hong Kong is operated from day to day.

(18)

MK

14.

RECLIVED IN KLGISTRY NO. 51

5 JUL 1983

DESK OFFICFO

PA

REGISTRY

¡Action Taken

73 1/2 CM-7/

-

XZGNI

NO

(b)

This is not really an intelligence matter.

(c)

Confidence

in Hong Kong is essentially a political and psychological

problem. It is for political reasons that Ministers will

want to know if confidence in Hong Kong is collapsing

since it could lead to a situation where HMG might seek ways of taking action to mitigate the consequences.

If the Bank of England or Treasury were invited to

contribute to a study on confidence in the Hong Kong

economy they would almost certainly wish to go further

and discuss contingency planning. This would cut across

the confidential work being carried out by the Governor

and the Financial Secretary in Hong Kong. The Governor

is determined, in order to maintain confidence, that

knowledge of any of his contingency plans should be restricted to the smallest possible group of people.

SECRET

/(d)