TNAG-1391-FCO40-1863-Future-of-Hong-Kong-briefing-for-meetings-and-visits-1985 — Page 78

etween 22

!

-

25 July 1985.

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:

has

6. A Land Commission made up of British and Chinese officials

been established in Hong Kong to conduct consultations on the

implementation of Annex III to the Joint Declaration dealing with

Land. We expect the first meeting of the Land Commission to

to take

place in late June.

B.

HONG KONG AFTER THE AGREEMENT

(i) THE ECONOMY

•

7. All the indicators show that Hong Kong's economy, having borne

the uncertainties of the past two years with resilience, is now

expanding with renewed confidence. The Hang Seng Index stood at

989.19 points on 1 October 1984, just after

1 October 1984, just after the initialling of the

draft agreement. On 30 May 1985 it stood at 1621.66 The linking

of the Hong Kong dollar to the US dollar in October 1983 has

stabilised the currency. The Hong Kong dollar on 30 May stood three

cents higher against the US dollar than it had six months before,

and, like the US dollar, is therefore very strong against other

currencies.

8.

Hong Kong's Financial Secretary presented his budget for 1985/86 to Hong Kong's Legislative Council on 27 February. His budget

projects good economic prospects for Hong Kong in 1985:

(a)

a growth rate in the GDP of 7%;

(b)

(c)

a growth in domestic exports of 11% and in re-exports of 30%,

giving a growth for total exports of 18%

a growth of private investment in plant machinery of 16% and in

building and construction of 2%; and

(d) an inflation rate of 5.5%.

9.

With

The Financial Secretary forecast a budget deficit of HK$ 1 billion for the coming year. This follows three years of deficits,

produced by a combination of world recession, a fall in Hong Kong

the future. property values, and political uncertainty over uncertainty removed by the agreement, and Hong Kong's economy

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