TNAG-1373-FCO40-1819-Ministerial-visits-from-the-UK-to-Hong-Kong-1985 — Page 23

JA4ASD

CONFIDENTIAL

MR RENTON'S VISIT TO HONG KONG (27 31 OCTOBER 1985)

2. TEXT OF SCENE SETTING TELEGRAM FROM HONG KONG

1.

as

When he arrives in Hong Kong Mr Renton will find an

air of "business as usual" The signature of the Joint

Declaration removed a large element of uncertainty about

the intentions of the Chinese and British Governments

regards the future of Hong Kong. It confirmed Chinese

acceptance of British administration over Hong Kong for the next twelve years and their agreement that the social and economic systems should remain unchanged thereafter. This has engendered a substantial degree of

of short term

confidence and provided a basis on which longer term

confidence can be built.

2.

is

Economically the rate of growth has not been as

still expected to reach

Unemployment stands at only 3% with

effect the workforce

is fully

high as it was last year but

between 4.5 and 5%.

1% underemployment.

In

employed. Inflation is running at 3.3%. Domestic export

rates have fallen by 6% compared with last year but a

strong rise in re-exports, particularly to China, has

maintained Hong Kong's performance in international

The link with the US dollar has held well in

spite of the gyrations of the foreign exchange market

early this year.

trade.

3.

The

process of extending the elected members of the

District Boards, of creating a new regional council and of installing a partly elected central legislature

(LEGCO) have all, with a few short hiccups (as over the

Powers and Privileges Bill), gone very smoothly. The

resulting composition of

of the Legislative Council is not

CONFIDENTIAL