CONFIDENTIAL

3. WE HAVE POINTED OUT SEVERAL TIMES TO THE N CN A THAT WE ARE NOT CONCERNED ABOUT THE NUMBERS OF THOSE TRANSITTING HONG KONG: WE ARE HOWEVER VERY CONCERNED ABOUT THE NUMBER OF PEOPLE WHO LEAVE CHINA, CLAIMING TO GO ELSEWHERE, AND THEN REMAIN IN HONG KONG. THE OBVIOUS ANSWER, WE HAVE SAID, IS THAT ALL THOSE WHO ARE GOING TO E.G THE PHILIPPINES SHOULD GET VISAS FROM THE RELEVANT EMBASSY IN PEKING BEFORE LEAVING CHINA. THIS MESSAGE DOES NOT SEEM TO HAVE GOT THROUGH. INDEED, LOW LEVEL INTELLIGENCE

REPORTS SUGGEST THAT IT IS NOW EASIER TO GET A CPG PASSPORT CLAIMING AN ONWARD DESTINATION THAN TO GET PERMISSION TO TRAVEL

TO HONG KONG,

4. WE ARE STILL UNCLEAR ABOUT THE PRECISE REASONS FOR THE SHARP

INCREASE OF THE PAST TWO WEEKS. AS FROM THE END OF JULY THE CHINESE BEGAN OPERATING A POLICY OF SELF-RESTRAINT?'. THOSE ARRIVING AT SHUM CHUN WERE GIVEN A DATE ON WHICH THEY COULD CROSS.

MOST HAD TO WAIT 10-14 DAYS. ON 26 SEPTEMBER THAT POLICY WAS ABANDONED AND PEOPLE WERE ALLOWED TO CROSS AS THEY ARRIVED. AN OPTIMISTIC INTERPRETATION WOULD BE THAT THIS IS A CLEARING OF THE BACKLOG BEFORE A MORE RESTRICTIVE POLICY ON TRAVEL PERMITS IS IMPLEMENTED. THERE IS SOME SUPPORT FOR THIS VIEW FROM LOW LEVEL INTELLIGENCE REPORTS. ALSO FROM THE FACT THAT ALL OF THOSE WHO HAVE ARRIVED DURING THE LAST TWO DAYS HAD APPLIED FOR PERMITS AT LEAST 12-18 MONTHS AGO. NEVERTHELESS, IT WOULD BE UNWISE TO CLUTCH TOO MUCH AT THIS STRAW. EVEN IF THE CHINESE ARE CLOSE TO DOING SOMETHING TO STEM THE FLOW WE SEE EVERY ADVANTAGE IN THE PROBLEM BEING PUT SQUARELY TO HUANG HUA,

MACLEHOSE

FILE S

HK & GD FED

PS/LORD GORONWY ROBERTS

MR CORTAZZI

MR MURRAY

2 CONFIDENTIAL

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