TNAG-1320-FCO40-1726-Future-of-Hong-Kong-assessment-of-public-opinion-1984 — Page 15

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FREELY EXPRESSED. MANY DISTRICT OFFICERS HAVE REPORTED THAT THE

FUTURE IS LESS DISCUSSED ALTHOUGH WHETHER THIS REFLECTS MORE

THAN A MOOD OF RESIGNATION IT IS DIFFICULT TO SAY. A TELEPHONE

OPINION POLL CARRIED OUT BY THE HONG KONG GOVERNMENT IN JANUARY

FOUND THAT 20 PER CENT OF RESPONDENTS PLACED QUOTE THE FUTURE OF

HONG KONG UNQUOTE AS THE PROBLEM OF MOST CONCERN TO THEM PERSONALLY.

THIS SHOWED A DROP FROM THE PREVIOUS POLL IN NOVEMBER 1983, WHEN

27 PER CENT HAD DONE SO.

MORALE OF PUBLIC OFFICERS

6. THIS WAS COVERED IN DAVIES' LETTER TO CLIFT OF 13 FEBRUARY.

BRIEFLY WHILE MOTIVATION REMAINS HIGH THERE IS A WIDESPREAD

FEELING OF INSECURITY. MANY PUBLIC OFFICERS TAKE IT FOR GRANTED

THAT THERE WILL BE SOME SORT OF COMMUNIST-CONTROLLED GOVERNMENT

AFTER 1997 AND THAT THEIR PROSPECTS FOR SERVICE AFTER THAT

DATE MUST BE IN DOUBT.

ECONOMIC INDICATORS

7. DESPITE THE POLITICAL UNCERTAINTY MOST ECONOMIC INDICATORS

HAVE SHOWN SOME IMPROVEMENT.

8. SINCE THE INTRODUCTION OF THE EXCHANGE RATE STABILISATION

SCHEME IN OCTOBER 1983 THERE HAS BEEN A SUBSTANTIAL SWITCH

INTO HONG KONG. IN THE PAST FEW WEEKS THE EXCHANGE RATE HAS

STRENGTHENED TO BELOW THE LINKED RATE OF US DOLLARS 7.80.

AND INTEREST RATES HAVE ACCORDINGLY FALLEN BELOW US RATES.

9. INVESTMENT IN PLANT AND MACHINERY WAS VERY SLUGGISH IN 1983

ALTHOUGH THERE WERE SIGNS OF IMPROVEMENT IN THE FOURTH QUARTER.

EXPENDITURE ON PLANT MCHINERY AND EQUIPMENT SHOWED ONLY A

MARGINAL INCREASE IN REAL TERMS IN 1983. WITH THE CURRENT RECOVERY

OF THE EXPORT SECTOR INDUSTRIALISTS' RELUCTANCE TO INVEST ON

ANY SIGNIFICANT SCALE COULD HAVE SERIOUS CONSEQUENCES FOR THE

SIZE AND EFFICIENCY OF PRODUCTIVE CAPACITY AND FOR THE EXTERNAL

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