4.

The Chinese are putting a price on (a) that may be too

high for Hong Kong to pay. We are in consultation with

our Mission in Peking and with the Governor on this and are

awaiting the latter's further proposals; when these are

received it is likely that a submission will be made to

Ministers.

5. The Chinese have not responded as yet to our approach

under (b); if and when they do, their price may again be

too high to pay (although this seems unlikely, as the Governor

sees advantage to Hong Kong in deporting to China as many of

his communist prisoners and detainees as the Chinese will

agree to take).

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