CONFIDENTIAL
1330
MDHIAN
TODAY. A GOOD INDICATION OF THE EXTENT TO WHICH PEOPLE IN HONG KONG HAVE BEEN COWED BY LI PENG'S RE-EMERGENCE WILL BE THE NUMBERS THAT
ATTEND THE PLANNED POP CONCERT IN AID OF THE PEKING STUDENTS TOMORROW (28 MAY).
5. THE LATEST DISTRICT OFFICER REPORTS AND ANECDOTAL EVIDENCE REVEAL WIDESPREAD DISAPPOINTMENT AT THE OUTCOME SO FAR. CONFIDENCE HAS SUFFERED WHAT MANY DESCRIBE AS PERMANENT DAMAGE. FAITH IN THE BASIC LAW AND JOINT DECLARATION HAS AT LEAST IN THE SHORT TERM, BEEN SUBSTANTIALLY UNDERMINED. TWO BASIC LAW DRAFTERS HAVE RESIGNED FROM THE BLDC AND MANY OTHER LOCAL REPRESENTATIVES IN CHINESE POLITICAL ORGANISATIONS SUCH AS THE NPC, CPPCC ETC ARE SAID TO BE CONSIDERING THEIR POSITIONS. PREDICTABLY, INCREASED EMIGRATION IS FORECAST BY MANY COMMENTATORS.
6. ANECDOTAL EVIDENCE FROM CIVIL SERVICE SOURCES SUGGESTS THAT THE
EFFECT HAS ALREADY BEEN SEVERE AND THAT THE USE OF FORCE IN PEKING WOULD CAUSE A FURTHER LOSS OF CONFIDENCE. SOME HAVE EXPRESSED CONCERN THAT THE HONG KONG GOVERNMENT MAY BE PERCEIVED AS IMPOTENT AND IRRELEVANT IN THE FACE OF THESE MAJOR DEVELOPMENTS. THERE IS ESPECIAL CONCERN OVER THE IMPLICATIONS FOR HONG KONG'S AUTONOMY.
7. THE HANG SENG INDEX HAS REFLECTED EVENTS AND RUMOURS IN PEKING, MOVING ERRATICALLY DOWNWARDS FROM 16 MAY WHEN IT STOOD AT 3,289, TO CLOSE ON 26 MAY AT 2,765. THE EXCHANGE RATE AND INTERBANK INTEREST RATES HAVE HOWEVER REMAINED STABLE.
WILSON
YYYY
DISTRIBUTION
52
ΜΑΙΝ
49
.HONG KONG AGREEMENT
. (RESTRICTED)
LIMITED
HKD
HD/FED
PUSD
PS/LORD GLENARTHUR
PS/MR EGGAR
MR GILLMORE
MR MCLAREN
RESEARCH (FE)
PAGE 2 CONFIDENTIAL
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