TNAG-1468-FCO40-1997-Visits-by-members-of-the-Office-of-the-Unofficial-Members-of-1986 — Page 151

CONFIDENTIAL

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4. HIIT HIS THINS KIND OF FEELING WHICH LIES BEHIND THE RECENT REVIEW OF HONG KONG '86** WITH ITS VRVND FRONG PAGE TITLE ''JITTERY CINTY'' IN THE FAR EASTERN ECONOMIC REVIEW (''FINE HOPES FADE TO FEARS'') AND BEHIND THE HINTERPRETATION IN THE FINANCIPAL PRESS OF INCREASING SOFTNESS #N THE MMDDLE LEVEL RESIDENTINAL PROPERTY MARKET AS ''DEFINITE SIGNS THAT THOSE PEOPLE WHOSE BELIEF IN HONG KONG'S FUTURE IS INTEGRAL TO ITS FUTURE WELL-BEING ARE STARTING TO HAVE

SECOND THOUGHTS''.

5. HN ALL THE HONG KONG GOVERNMENT SAYS AND DOES WE SEEK TO COUNTER THESE TRENDS. BUT EXPECT THIS SUBDUED AIR OF PESSIMISM TO PERSIST AT LEAST UNTIL SOME EVENT PRODUCES A NEW FILLIP. THERE IS NONE N SIGHT AT THE MOMENT AND THMS MAKES AT DOUBLY IMPORTANT THAT THERE SHOULD BE NO NEW NEGATIVE FACTOR INDUCED EITHER BY ANY CHINESE

ACTION,

OR BY THE FOURTH MEETING OF THE JOHNT LIAISON GROUP IN JULY. WHAT WE REALLY NEED INS SOME POSITIEVE ACHIEVEMENT AT THAT GROUP

MEETING.

YOUDE

LIMITED

HKD

FED

ERD

PROTOCOLD.

PS

PS/MR RENTON

PS | PUS

SIR W. HARDING

MR WILSON

(REPEATED AS REQUESTED)

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