SECRET UK EYES A
the public mood. Without significant liberalisation in China, the effects of the British nationality package and analogous schemes by other countries could turn out to be only temporary.
ii. Business attitudes
It
Business confidence has held up better than the general public mood. The stock market and property market are both reasonably high. In part, this is because of the traditional conservatism of local business leaders who understand the importance attached by Peking to stability at the expense of democratisation. also reflects the availability of Japanese funds seeking investment opportunities and the willingness of the banks to provide long-term credit. Behind all this there is also a hard-headed assessment that (in all but the bleakest of scenarios) China's dependence on the range of facilities provided by Hong Kong offers strong reassurance for the territory's long term economic prosperity. The critical attitude towards the Hong Kong Government (HKG) shown by Jardines seems to have little support from the Hong Kong business community generally, although there are some Hong Kong businessmen (such as Gordon Wu) who are prone to currying favour with the Chinese, siding with them against the HKG when opportunities arise. Also on the negative side there is likely to be some nervousness that budgetary problems and the need to increase taxes could reduce Nong Kong's competitiveness.
iii.
Potential sources of major unrest in the approach to 1997
As stated in the LIC paper, past experience shows that minor incidents can easily flare up, but the police's ability to contain such incidents has been tested, and it seems adequate. The contingency which would pose the most serious threat of a rapid deterioration of public order would be the strong and widespread public reaction which might occur in the event of renewed repressive actions by the authorities in China - ie demonstrations in Hong Kong similar to those which occurred after the killings in Peking in June 1989 but which might in future be on a larger scale and less disciplined.
There are several other factors which could contribute to major unrest, but in a more gradual way:
a. Hong Kong's uneven political development. The approach of 1997 has stimulated intense political debate, but the
DEBAAS
SECRET UK EYES A
No comments yet.
Private notes are available after approval.