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citizenship to British subjects in the United Kingdom

and to British subjects in Hong Kong would be interpreted

here as related to Her Majesty's Government's intentions

about the long-term future of Hong Kong.

8.

The creation of a new kind of British overseas

Citizenship will certainly be seen as a first step towards

cutting Hong Kong adrift. This would seriously undermine

confidence, both internally and externally. I made these

points when I was first consulted informally on the draft

proposals for the Green Paper at the end of 1972. (See

my letter to Mr Wilford SCR 832/3481/72 of the 31st of

January 1973). I am convinced that it is in nobody's

interests to take any action which would reflect adversely

on stability or confidence in Hong Kong. It is particularly

important that no such action should be taken in the

difficult period before we reach an accommodation with

China about the long-term future of this territory.

9.

I must also make it clear that the proposal in

the Green Paper to create separate categories of British

citizenship and British overseas citizenship has caused

great resentment amongst members of the Chinese population,

particularly those who have been most closely associated

with the government. Senior Chinese Unofficial Members

of the Executive Council, who hold Hong Kong British

passports, still resent the loss of their right of entry

into the United Kingdom as a result of the Commonwealth

Immigrants Act of 1962. The way in which this decision

was implemented, without consultation, still rankles with

them.

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