China – Foreign Relations – Hong Kong (07/06/1984-08/14/1984) Box: RAC Box 13
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Collection: Laux, David N.: Files Folder Title: China – Foreign Relations – Hong Kong (07/06/1984-08/14/1984) Box: RAC Box 13 To see more digitized collections visit: https://reaganlibrary.gov/archives/digital-library To see all Ronald Reagan Presidential Library inventories visit: https://reaganlibrary.gov/document-collection Contact a reference archivist at: [email protected] Citation Guidelines: https://reaganlibrary.gov/citing National Archives Catalogue: https://catalog.archives.gov/ WITHDRAWAL SHEET Ronald Reagan Library Collection Name LAUX, DAVID: FILES Withdrawer CAS 6/11 /2010 File Folder CHINA-FOREIGN RELATIONS-HONG KONG (7/6/84- FOIA 8/14/84) M09-299/l Box Number 13 COLLINGS 25 ID Doc Type Document Description No of Doc Date Restrictions Pages 92558 CABLE HONG KONG 12667 I 7/6/1984 Bl R 6/21/2012 M299/1 92559 CABLE 2320412 JUL 84 7/23/ 1984 Bl B3 D 12/20/2017 M299/1 92560 CABLE 2403222 JUL 84 7/24/1984 Bl B3 D 12/20/2017 M299/1 92561 CABLE 2516212 JUL 84 I 7/25/1984 Bl B3 D 12/20/2017 M299/1 92562 CABLE 2617302 JUL 84 7/26/1984 Bl B3 D 12/20/2017 M299/1 92563 CABLE 2601592 JUL 84 7/26/1984 Bl B3 D 12/20/2017 M299/1 92564 CABLE RE HONGKONG 4 7/27/1984 Bl B3 D 12/20/2017 M299/1 92565 PAPER RE HONG KONG (P. 2 ONLY) 7/29/1984 Bl R 6/21/2012 M299/1 92566 CABLE HONG KONG 14280 4 7/31/1984 Bl R 6/21/2012 M299/1 Freedom of Information Act - (5 U.S.C. 552(b)] B-1 National security classified Information [(b)(1) of the FOIAJ B-2 Release would disclose internal personnel rules and practices of an agency [(b)(2) of the FOIAJ B-3 Release would violate a Federal statute [(b)(3) of the FOIAJ B-4 Release would disclose trade secrets or confidential or financial Information ((b)(4) of the FOIAJ B-6 Release would constitute a clearly unwarranted invasion of personal privacy ((b)(6) of the FOIAJ B-7 Release would disclose Information compiled for law enforcement purposes ((b)(7) of the FOIAJ B-8 Release would disclose information concerning the regulation of financial institutions ((b)(8) of the FOIAJ B-9 Release would disclose geological or geophysical Information concerning wells ((b)(9) of the FOIAJ C., Closed In accordance with restrictions contained In donor's deed of gift. WITHDRAWAL SHEET Ronald Reagan Library Collection Name LAUX, DA YID: FILES Withdrawer CAS 6/11/2010 File Folder CHINA-FOREIGN RELATIONS-HONG KO~G (7/6/84- FOIA 8/14/84) M09-299/1 Box Number 13 COLLINGS 25 ID Doc Type Document Description No of Doc Date Restrictions Pages 92567 CABLE 0l 1628Z AUG 84 2 8/1/1984 Bl B3 D 12/20/2017 M299/1 92568 PAPER RE HONG KONG (P. 7 ONLY) 8/2/1984 Bl B3 D 12/20/2017 M299/1 92569 PAPER HONG KONG 14538 3 8/2/1984 Bl R 6/21/2012 M299/1 92570 PAPER LONDON 17506 3 8/3/1984 Bl R 6/21/2012 M299/1 92571 PAPER HONG KONG 14 772 7 8/6/1984 Bl R 6/21/2012 M299/1 92572 PAPER BEIJING 14018 8/7/1984 Bl R 6/21/2012 M299/1 92573 CABLE LONDON 17962 2 8/9/1984 Bl R 6/21/2012 M299/1 92574 CABLE STATE 237967 3 8/11/1984 Bl R 6/21/2012 M299/1 92575 CABLE HONG KONG 15344 3 8/14/1984 Bl R 6/21/2012 M299/1 Freedom of Information Act - [5 U.S.C. 552(b)) B-1 National security classified Information [(b)(1) of the FOIAJ B-2 Release would disclose internal personnel rules and practices of an agency [(b)(2) of the FOIAJ B-3 Release would violate a Federal statute [(b)(3) of the FOIAJ B-4 Release would disclose trade secrets or confidential or financial information [(b)(4) of the FOIAJ B-6 Release would constitute a clearly unwarranted Invasion of personal privacy [(b)(6) of the FOIAJ B-7 Release would disclose information compiled for law enforcement purposes [(b)(7) of the FOIAJ B-8 Release would disclose information concerning the regulation of financial Institutions [(b)(B) of the FOIAJ B-9 Release would disclose geological or geophysical information concerning wells [(b)(9) of the FOIAJ C. Closed In accordance with restrictions contained In donor's deed of gift. CBNFIBENTIAL ' NATIONAL SECURITY COUNCIL SECRETARIAT PAGE 01 AMCONSUL HONG KONG 2667 DTG : 0611S3Z JUL 84 PSN:007994 EOB4 76 AN004224 TOR: 188 / l 2ll!Z CSN : HCE2 23 CURRENCIES) S. (U) WHATE VER THE CAUSE , THE HONG KONG ASSOC I AT I ON DISTRIBUT ION : CHL0-01 SIGU-01 LEVN-01 l.~U X- 01 ROBN-01 MINN-01 OF BANK S WAS BEL IEVED LIKEL Y TO RAISE HK DOLLAR / 006 A2 INTEREST RATES AT ITS REGU LAR MEETING ON FRIDAY AFTERNO ON . WITH THE STRENGTH OF THE U.S. DOLLAR IN RECENT DA YS, INTERBANK RATES HAD BEE N FLOATING ABOUT \/HTS ASS IGNED DISTRI BUTI ON: TWO PERCENTAGE POINTS OVER PRIME , AND THE BANKS ARE SIT: LIKELY TO WANT TO NARR OWTHIS DIFFERENTIAL. EOB : COMMEN T: 6. ILOU ) A SENI OR HKG ECONOMIC POLICYMAKER TOLD US HE WAS AS SURPR ISED AS AN YONE ELSE BY THE MOVEMENT. HE TOLD OP IMMED US HE HAD HEAR D NOTHING ABOUT ANY PLANS TO CHANGE THE PEG , STU2184 ALTH OUGH IT WAS POSSIBLE THAT IT COULD BE DONE WITH OU T DE RUMJNG #2667 1881154 HIS KNOWLEDGE . 0 061153Z JUL 84 FM AMCONSUL HONG KONG 7. ILOU ) IT SEEMS UNLIKELY -- THOUGH NOT INC ONCEIVA BLE -- THAT THE HKG WOULD CHOOSE TO ALTER THE PEG INTENTIONALLY TO SECSTAT E WASH DC IMMEDIATE 4619 NOW . THE TIMING IS STRANGE : GOVERNOR YOUDE , CH IEF SE CRE TARY HADDON-CAVE, AND FINANCIAL SE CRETARY BREMR IDGE ARE INFO AMEMBASSY BE IJING 1043 ALL OUT OF TOWN AND THE LATTER TWO ARE NOT DUE BAC K SOON. AMEMBASSY LON DON IMME DIATE 5321 IN ADD ITI ON, HKG POLICYMAKER S HAVE TOLD US REPEATEDL Y IN AMEMBASSY TOKYO 0845 RECENT MONT HS THAT THEY ARE WELL AWARE OF THE DANGERS AMEMBASSY SINGAP ORE 0410 INV OLVED IN ADJUSTING THE PE G, SINCE SPE CULATORS COULD AMCONSUL SHANGHAI 3131 EASIL Y CONCLUD E THAT ONE MOVE COULD LEAD TO OTHERS, THUS AMC ON SUL GUANGZH OU 3954 LEADING TO DEST~BILIZATION OF THE CURRENCY . ZEN/AMCONSUL SHENYANG POUCH All TAIPEI 8. (LOU) WHILE THIS MOVEMENT MA Y TURN OUT TO BE NO MORE AMEMBASS Y KUALA LUMPUR 6780 THAN A FLASH IN THE PAN, RELATED INTER Al IA TO THE AMEM BASS Y SEOUL 691.0 STRENGTH OF THE U.S. DOLLAR, IT COU LD HAVE SOM E SER IOUS AME MB AS SY MAN ILA 6560 REPERCUSSIONS . EVEN IF THE LOCAL BANKS RAISE INTEREST AMEMBASS Y BANGKOK 2397 RATES EN OUGH TO PUSH THE HK DOLLAR BACK INT O ITS "NORMAL " RANGE ON MONDAY MOR NING (JULY 91, THE EPIS ODE WILL BE 881JPleEUTIAl ENOUGH TO RAISE THE LEVE L OF CONCERN OVER THE HKG ' S ABIL ITY TO MA INTAIN THE "l INK ". AS ONE TRADER NOTED TO LIMIT ED OFFICIAL USE HONG KONG 12667 E. 0. 12356: N/A US, THE HONG KONG DOL LAR MARKET IS OVER WHELM INGL Y AFFECTED TAGS : EFIN, ECON, HK BY PSYCHOLOGICAL FACTORS , AND -- UNLESS THE GO VERNMENT SU BJEC T: HONG KONG DOLLAR BREAKS LOOSE FROM ITS PEG WAS INDEED PREPARING TO CHANGE THE PEG VOLUNTARIL Y -- IT WOULD BE CLEAR TO ALL CONCERNED THAT FOR ONE DAY AT 1. (U) IN LATE AFTERNOON TRADING ON FRIDAY JULY 6, THE LEAST, THE MARKET BROKE THE PEG .. AND COUL D DO SO AGAIN . HONG KONG DOLLAR BROKE DRAMATICALLY THROUGH THE FLOOR LE VIN OF THE 7. 78-7. 82 (HK DOL S PER USOOLJ RANGE IN WHICH IT BT HAD TRADED SINCE THE HKG "l INKED " THE TWO CUR RE NC IES LAST FALL . BY 5 P. ~ IT HAD REACHED 7. 95 HKDOLS PER USDOL . 2. (U) HONG KONG FOREX MARKET TRADE RS -T Ol.O ECONOFFS THE MARKETS \/ERE HIGHLY TURBULENT IN THE FINAL HOURS OF DEALING ON FR IDA Y. ONE TRADER SAI D DEALING APPROACHED A "PANIC SITUATION", WITH ALL BANKS -- INCLUDING THE HONG KONG ANO SHANGHAI BANK I NG CORPORATION (HKSB) FRANTICALLY SEEKING TO BUY U.S. DOLLARS . DECLASSIFIED SIGNIFICANTLY, THE HKSB -- WHICH AS THE MAJOR NOTE-ISSUING BANK FREQUENTLY AC TS ON BEHALF OF THE HKG NLR . 1-,:z_qq .iq:z.sss -- \/AS SELLING, AND NOT BUYING, HONG KONG DOLLARS . HOIIEVER, THE TRADER TOLD US ACTUAL HONG KONG DOLLAR TRADES AT THE HIGH EXCHANGE RATES HAO BEEN RATHER THIN . BY \f.M\- NARA DATE w/U/',_,, 3. (U) THE TRADERS TOLD US THERE HAD BEEN RUMORS IN THE MARKETS IN RECENT DAYS THAT THE BURGEONING STRENGTH OF THE US DOLLAR WOULD FORCE THE HONG KONG GOVERNMENT TO CHANGE THE PEG. THE MOST WI DEL Y-RUMOREO NEW LEVEL WAS 8 HKOOLS PER USOOL, ANO IT WAS TOWARD THIS LEVEL THAT THE HKO DRIFTED. 4. IU) ONE TRADER ADVISED CAUTION IN INTERPRETING THE MOVEMENTS, SUGGESTING THAT THE DROP IN THE HK DOL WAS A MINOR MOVEMENT, ANO THAT IT COULD BE CAUSED BY THE RIPPLE EFFECT OF ACTIONS IN THE MARKETS OF OTHER MAJOR CURRENCIES . IIF, FOR EXAIIPLE, EUROPEAN ANO JAPANESE CENTRAL BANKS ttADE A COORDINATED EFFORT TO DEFEND THEIR --CCUI~ I ~rNT I Al WITHDRAWAL SHEET Ronald Reagan Library Collection Name Withdrawer LAUX, DAVID: FILES CAS 6/11/2010 File Folder FOIA CHINA-FOREIGN RELATIONS-HONG KONG (7/6/84-8/14/84) M09-299/1 COLLINGS Box Number 13 25 ID Document Type No of Doc Date Restric- Document Description pages tions 92559 CABLE 1 7/23/1984 Bl B3 2320412 JUL 84 Freedom of Information Act - (5 U.S.C.