economic benefits from the setting up of a separate Hong Kong register.

CONCLUSION

A change of the kind advocated by Mr Pao would cause the UK Government

embarrassment, and would make possible a lowering of safety standards.

Moreover, in the longer tem it is possible that we shall be more flexible

in the nationality requirements for senior officers for British ships

and that this would give Mr Pao much of what he is seeking. In these

circumstances, in spite of the uncertain economic gain to Hong Kong, we recommend

against relaxation of the nationality requirement for senior officers of Hong

Kong registered ships, or the setting up of a separate Hong Kong register of

shipping.

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