TNAG-1877-FCO40-2668-Student-demonstrations-and-internal-political-situation-in-C-1989 — Page 43

ROZANU

E. CONFIDENCE IN HONG KONG

16. HANG SENG INDEX

Aware that Hang Seng index has fallen substantially as a result

of recent events in China.

But this does not reflect underlying strength of Hong Kong

economy.

17. WITHDRAWAL OF INVESTMENT FROM CHINESE BANKS IN HONG KONG

Aware of reports of this. A matter for individual investors and

institutions.

18. WHAT IS HMG DOING TO REASSURE HONG KONG PEOPLE?

Have made it very clear that we shall continue to stand by Hong

Kong and by our obligations under Joint Declaration.

Will be consulting urgently with Governor to see what more can be done to reassure Hong Kong people.