TNAG-2814-FCO40-4060-Future-of-Hong-Kong-International-Rights-and-Obligations-(IR-1993 — Page 31

·JAN 28 '93 11:04 UKDEL

FCO 2

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THE 26 JAN 42 13:17

PG.62

GOVERMENT HOUSE HONG KONG

DE 28 JPN 83 08:58

PG.88

Overview

DRAFT CONFIDENTIAL

P.3/13

1.

supportive

cate

Fund

A generally favourable and encouraging report. It is

Of

ONC COTE Anued commitment to the linked exchange and of the establisment of the Monetary Authority. Braff find

find inflation still a major concern and Bre concerned about the projected reduction in fiscal ausplus and the consequent expansionary effect. They stress the need to restrain operational expenditures and to smooth capital expenditares, They support our HOMELITES taken to allevinta labour and land supply constraints and also suggest the use of tax measures to raise waditional revenues,

Objectives

2. (A) To highlight favourable points in the report; and

(B)

address and

(1) the side effects of

system;

Fund stafI ́S CORDern about

1

ene linked exchange rate the