ARZACU
CONFIDENTIAL
VISIT OF THE LORD GLENARTHUR TO HONG KONG: 29 JUNE- 1 JULY 1988
BRIEF NO 17: FINANCIAL QUESTIONS
Objectives
1.
To reaffirm our support for the maintenance of the Hong Kong/US dollar link.
2.
To indicate our understanding that Hong Kong is different
from the other Asian Newly Industrialised Economies (NIES) and that
it should be treated in a distinct way.
3.
To welcome the Hay Davison report and its recommendations for
reform of the Hong Kong Stock and Futures Exchanges.
Points to make
(a)
HONG KONG/US DOLLAR LINK
[For use with Governor, Officials and ExCo]
political reasons for maintaining link at present level
compelling, although economic arguments less clear cut.
we must continue to resist US calls for revaluation of HK/US
dollar link. These calls likely to continue, however unjustifiably,
as long as US has such a large global trade deficit.
But
pressure for revaluation of HK dollar has diminished.
further weakening of US dollar could spark renewed speculation. well equipped is Hong Kong to deal with this?
(b)
HONG KONG AS A NIE
[For use with Governor, officials and ExCol
How
entirely understand differences between the Asian "dragons". Wrong to lump Hong Kong together with others, especially Taiwan,
South Korea.
-
we take every opportunity to stress this point to Americans, OECD, etc. Some signs that message is getting through.
CONFIDENTIAL
17
No comments yet.
Private notes are available after approval.