TNAG-1413-FCO40-1889-Future-of-Hong-Kong-annual-report-to-Parliament-on-Hong-Kong-1985 — Page 200

CONFIDENTIAL

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1

HELD IN STORE. FOLLOWING THE ANNOUNCEMENT OF THE AGREEMENT THE

FUTURE LOOKED MUCH MORE ASSURED. ONE YEAR FORWARD FROM THAT DATE

THERE ARE STRONG INDICATIONS OF A RETURN OF CONFIDENCE IN ALL

SECTORS OF THE COMMUNITY.

54.

OVER THE NEXT 12 MONTHS, THAT CONFIDENCE IS LIKELY TO BE MAINTAINED. SO FAR AS THE DEVELOPMENT OF REPRESENTATIVE GOVERNMENT IS CONCERNED, FOLLOWING THE RECENT CHANGES IN THE COMPOSITION OF THE LEGISLATIVE COUNCIL, THE COMING YEAR WILL BE A PERIOD OF CONSOLIDATION RATHER THAN NEW INITIATIVES. ON THE ECONOMIC FRONT, THE INDICATORS ARE REASSURING, NOTWITHSTANDING THE POSSIBILITY OF CONTINUING REDUCED DEMAND FOR DOMESTIC EXPORTS IN HONG KONG'S MAIN EXPORT MARKETS: EMPLOYMENT IS EXPECTED TO REMAIN STABLE AND THE RATE OF INFLATION LOW: THE RECOVERY OF THE PROPERTY MARKET IS LIKELY TO CONTINUE: AND THE PROSPECTS FOR A RETURN TO A BALANCED BUDGET IN 1986-87 ARE GOOD. THE SINO-BRITISH JOINT LIAISON GROUP AND LAND COMMISSION HAVE GOT OFF TO GOOD STARTS. HONG KONG IS ONCE AGAIN ABLE TO LOOK TOWARDS THE

FUTURE CALMLY AND CONFIDENTLY.

55. HER MAJESTY'S GOVERNMENT REMAIN COMMITTED TO THE TERRITORY

OF HONG KONG AND TO ITS PEOPLE. THEY WILL CONTINUE TO FULFILL

THEIR RESPONSIBILITIES FOR HONG KONG'S SOUND ADMINISTRATION AND TO LOOK AFTER HONG KONG'S INTERESTS INTERNATIONALLY. THEY WILL WORK TO ENSURE THE SMOOTH IMPLEMENTATION OF THE SINO-BRITISH JOINT DECLARATION, AND TO PRESERVE ECONOMIC PROSPERITY AND SOCIAL

STABILITY.

HOWE

ENDS.

HONG KONG AGREEMENT : RESTRICTED

LIMITED

HD/HKD

HD/FED

COPIES TO:

MR FIFOOT, LEGAL ADVISERS MR WOOD LEGAL ADVISERS

RESEARCH D (FE)

D/HD PUSD

MR WILSON

CONFIDENTIAL

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