TNAG-2239-FCO40-3218-Future-of-Hong-Kong-Royal-Navy-presence-1991 — Page 70

FCO SUMMARY

CONFIDENTIAL

(HMG's Foreign Policy objectives/aims.

Policy on defence

relations) (FCO Hong Kong Department tel 071-270 2653)

(Desk Officer: Terry Furness)

Under the Sino-British Joint Declaration (JD) Hong Kong will

be restored to China from 1 July 1997. The British and Chinese Governments hold regular Joint Liaison Group meetings to consult on the implementation of the JD and to ensure a smooth transition. The events of June 1989 in China caused a brief suspension of JLG meetings and progress has been slow since then. Promulgation in April 1990 of the Basic Law for Hong Kong post 1997 implements a major provision of the JD. Emigration continues at a high level. The announcement of the Nationality package to grant 50,000 heads of families British passports has however, had a positive effect. economy which grew last year by only 2.5% is expected to grow only slightly more rapidly this year (1991) by about 3.5%. Trade performance however showed a remarkable improvement in the early part of 1991 although inflation continues to surge as higher fiscal levies and other price increases came into effect. Anti-inflationary measures are

to be introduced. Hong Kong Government has embarked on a

The

series of major infrastructure projects to satisfy requirements into the next century. Major increases in tertiary education are also being implemented. After the September 1991 elections there will, for the first time, be 18 directly-elected members in the Hong Kong Legislative Council. An announcement of the withdrawal of the first battalion of the Hong Kong Garrison is expected in

July 1991.

Hong Kong Department

2 July 1991

BUSAKJ/1

VAS

CONFIDENTIAL