I'.'
CONFIDENTIAL
morale.
to be at a
faster pace
than hither to achieved;
of
the senior ranks had
а steering group of senior government officials was charged with
recommending to the Governor how this objective was best to be
attained without jeopardising either the Force's efficiency or its
Initial consideration was given to the possibility
introducing a limited compensation scheme on lines similar to
schemes introduced in to former British dependent territories at the
time of constitutional change, which among other things, would
enable pensionable overseas officers who were either required to
retire, or superseded for promotion to make way for local officers,
to be compensated for loss of career.
IV.
STATE OF THE ECONOMY
27.
The
Sino-British Joint Declaration on the question of Hong
Kong removed much of the shadow of uncertainty which had hung over
the Hong Kong economy in 1983 and most of 1984. But the economy
remained dependent on trade and hence vulnerable to external forces
outside Hong Kong's control.
28.
After a year of strong
economy showed signs of slowing
other economies. For 1985 as a
Hong Kong's GDP was
export-led growth, the Hong Kong
down in 1985, in line with many
whole the estimated growth rate of
The 41/2% to 5%, compared with 9.4% for 1984.
future performance of domestic exports added an extra element of uncertain ty to this forecast. Exports were increasingly affected by the growing threat of protectionism in Hong Kong's export markets.
29.
period
review
was
The performance of the Hong Kong economy as. a whole over the
of
characterised by a fall in domestic exports,
counterbalanced by substantial growth in re-exports,
a
unemployment, and a low rate of inflation.
a
low rate of
domestic exports was largely due to weak demand in
30.
The fall in
Hong Kong's
traditional
and the EEC.
however,
export markets,
the notably
United
States
Hong Kong's domestic exports and re-exports to China, continued to show substantial growth. In addition to being
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