CONFIDENTIAL
VISIT BY MR GOODLAD: 11-12 OCTOBER: MOOD OF THE COMMUNITY
15. The continued freedom of Hong Kong's news media has also become an issue. There has been considerable concern for some time about "self-censorship". This worry has been sharpened by Robert KUOK's purchase of 34.9 per cent of the SCMP. His control of the paper has been widely interpreted as likely to Lead to a much softer editorial line towards the CPG and a
the CPG and a far more hostile attitude towards HKG, especially on constitutional issues.
THE ECONOMY
The China Connection
16. Throughout the summer, the territory has watched closely the CPG'S attempts to engineer an economic "soft-landing". Initially, observers feared that political paralysis in Peking would prevent effective action at an early stage, leading to an economic crisis with serious consequences for Hong Kong investors.
17. This pessimistic assessment is no longer much in vogue:
- The CPG is regarded as having adopted policies
which tackle its fundamental economic problems, although even tougher measures are believed to be
necessary.
- A "reformer", Deputy Premier ZHU Rongji, is in
charge. The 1988 experience of inflation discrediting the "reformers" and strengthening the "conservative" faction within the CCP has not been
repeated.
Hong Kong's commentators have recognised that the territory's prosperity is derived from the PRC's
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CONFIDENTIAL
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