TNAG-2032-FCO40-2895-Visit-by-Douglas-Hurd--Secretary-of-State-for-Foreign-and-Co-1990 — Page 90

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SECRETARY OF STATE'S VISIT TO HONG KONG 13-16 JANUARY 1990 MDHIAN 2220 BRIEF NO 2: SCENE-SETTING TELEGRAM FROM HONG KONG

CONFIDENTIAL

FM HONG KONG

TO DESKBY 12090OZ FCO

TELNO 150

OF 120635Z JANUARY 90

INFO ROUTINE PEKING

SECRETARY OF STATE'S VISIT: HONG KONG MOOD

CONFIDENCE: GENERAL

1.

FEEDBACK REPORTS SUGGEST THAT CONFIDENCE IN HONG KONG'S FUTURE IS AT LOW EBB. THE MAJOR FACTORS AFFECTING CONFIDENCE HAVE BEEN EVENTS IN CHINA AND CHINA'S ATTITUDE TOWARDS THE TERRITORY. THERE HAS BEEN A SHIFT AWAY FROM THE BELIEF HELD BY MANY PREVIOUSLY THAT HONG KONG'S DESTINY LIES TO A LARGE EXTENT IN ITS OWN HANDS: THE REMEDY IS NOW SEEN FIRMLY TO DEPEND ON A FUNDAMENTAL CHANGE IN THE CPG WHICH MUST OCCUR QUICKLY. EVENTS IN EASTERN EUROPE HAVE RAISED HOPES (OR WISHFUL THINKING) THAT THE PRESENT CHINESE REGIME COULD SIMILARLY BE OVERTHROWN AND RESULT IN AN ACCEPTABLE FUTURE FOR HONG KONG. THE UNEXPECTEDLY LARGE NUMBER WHICH RESPONDED TO THE

ALLIANCE-ORGANISED DEMONSTRATIONS AT THE NEW YEAR WAS A MANIFESTATION OF THIS FEELING. SOME, HOWEVER BELIEVE THAT THE CHINESE LEADERSHIP WILL BECOME EVEN MORE REPRESSIVE IN ORDER TO

PROTECT ITSELF.

2.

THE CONVERSE IS THAT THE MORE PEOPLE BELIEVE THAT THE ANSWER TO HONG KONG'S FUTURE LIES OUTSIDE HONG KONG, THE LESS CONFIDENCE THERE IS IN DOMESTIC MEASURES SUCH AS INFRASTRUCTURAL INVESTMENT, IMPROVED EDUCATION, AMENITY IMPROVEMENT ETC. AN EXAMPLE IS THE MASSIVE PORT DEVELOPMENT PROPOSAL WHICH IN HEADIER DAYS WOULD HAVE BEEN PERCEIVED AS A MAJOR BOOST FOR HONG KONG. THE REACTION NOW HAS BEEN ONE OF CONCERN OVER WHETHER THE DEVELOPMENT CAN IN FACT BE FUNDED OR NOT AND THAT IT WILL RESULT IN HIGHER TAXES AND CUT-BACKS IN OTHER AREAS.

OTHER TRENDS WHICH INDICATE A GROWING LOSS OF CONFIDENCE ARE THE INCREASED WILLINGNESS NOW OF INDIVIDUALS:

3.

(A) TO ADMIT TO AND DISCUSS THEIR PLANS FOR EMIGRATION: AND

(B) TO PUSH FOR MEASURES, SUCH AS AN INCREASED PACE OF

DEMOCRATISATION, REGARDLESS OF KNOWN CHINESE DISPLEASURE. BUT WHEN DISPUTES OCCUR PUBLICLY THE DEEP-SEATED AVERSION TO CONFLICT WITH THE MAINLAND AGAIN BECOMES A FACTOR.

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