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established but meanwhile HMG should avoid any action
that may cause China to make difficulties for the Colony;
(b) that meanwhile we shall need to plan a strategy of social and institutional reform in consultation with the Hong Kong Government for completion by the mid-1980s; and
(c)
that great care will need to be exercised both by Hong Kong and HMG to maintain the link between them.
I.
The British Interest
3. The British interest requires the continuance of the status quo for some time yet; and an eventual amicable settlement with China of Hong Kong's future. The primary consideration for HMG is that changing the present colonial link will be extremely difficult without risking a massive exodus of Hong Kong Chinese refugees with humanitarian, if not legal, claims to entry into the United Kingdom. The number of UK belongers with legal claim to entry cannot be determined but it is thought to be comparatively small. However, there are currently some 24 million British subjects of Chinese origin in the Colony (a figure which is increasing at a rate of about 80,000 a year), of whom some 200,000 - 300,000 may have special claims on us through their con- nection with the colonial Government. The domestic political strains caused by the recent exodus of UK Passport Holders from Uganda indicates how serious this problem could be for us; and the exodus from Vietnam suggests that the scale could be much greater than might be expected. There is furthermore a risk that one of the world's leading financial centres might collapse if the political pressures become too great; and a contingent aid liability of substantial proportions if, as we could expect, loss of confidence in the Colony were to lead to industrial decline and unemployment. It is impossible to forecast at what stage such problems could occur; but once confidence began to erode a débâcle could quickly occur. As the history of Macao shows, there is no guarantee that China would be prepared to resume possession however desirable this might be to the colonial power and we could not look to Peking for help in overcoming our problems. These problems may be manageable when
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