TNAG-2749-FCO40-3964-Economic-situation-in-Hong-Kong-1993 — Page 155

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icketts

Mr Ricketts

Mr Hum

PA

REGISTRY Action Talen

Minister

PS/Mr Goodlad

Anzilo

26 MAH 1993

FROM: N C G Whitney

Hong Kong Department

DATE: 26 March 1993

cc: Sir J Coles

Mr Broadbent,

Economic Advisers

Mr Davies, FED

22

HONG KONG: TREASURY PAPER ON IMPLICATIONS OF A BREAK WITH CHINA

1. Mr Goodlad may wish to see an interim report of a study

being conducted by the Treasury to assess whether a serious

decline in relations with China would have implications for key

UK interests in Hong Kong.

2.

In anticipation of a decline in our relations with China,

the Chancellor commissioned the Treasury in late 1992 to conduct

an inter-departmental study on the implications for the Hong Kong economy of such a decline, and the possible effect on key UK interests. With a background of serious collapse in various

Hong Kong markets (stock, property, futures) in the 1980s and

associated problems in the banking sector, the Chancellor wished

to obtain some reassurance that problems which might arise in one sector of Hong Kong's economy would not cause major systemic

problems.

3.

As the Treasury's study progressed, the main focus shifted

from an examination of Hong Kong's economy to implications for

imp.break.ADM

SLM

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