CONFIDENTIAL

2

(contd)

3.

I asked Tan if the Canton authorities had any comments on our statistics. Those who made policy in China and in Hong Kong would wish to be sure that both sides were operating on the basis of figures which were broadly comparable. We were therefore anxious to know if figures kept at Shum Chun were significantly different from those we had provided. Tan said that the statistics had only been passed to Canton about a week ago since NC NA had wished to provide their own translation and analysis. He added that he had pointed out to WANG K'uang (the new No. 1 Director of N C N A) that over the 71⁄2 years since 1971 the average daily arrival rate had "only" been 74.3 (based on the overall balance of + 203,682 from 1971 to July 1978 which we have already given N C N A). Tan said that Wang believed that "in the long run" immigration was not a serious problem for Hong Kong and added (on his own account) that during the period of the "gang of four" there had been greater controls on people visiting Hong Kong. In the next one or two years he expected that fewer people would be coming to stay in Hong Kong. Meanwhile,

however, there was a backlog of people whose earlier applications to visit Hong Kong had been refused or delayed.

4.

In reply, I told Tan that we accepted that the present rate of new arrivals was higher than the longer- run average. However, for 75 people to come to Hong Kong every day for 7 years was a considerable burden. The highest figure we would like to see was about 50 a day. The rate over the past 7 years had been 48.6% higher than that, and this over a period in which, as he had said, there had sometimes been more restrictive policies within China. That was an added reason for concern about the present high level of arrivals. The problem was practical rather than political. We fully appreciated the close connections with Hong Kong of people in Kwangtung Province. However, Hong Kong was already extremely densely populated. The problems of large urban populations were appreciated in China and I believed there had been efforts to move people out of large cities such as Peking and Shanghai. This option was not open to Hong Kong. The overall balance since 1971 represented about 40% of the projected population of Sha Tin New Town. The burden of this unplanned increase in Hong Kong's population on housing, education, medical and transport facilities was very great: it no doubt contributed, inter alia, to high land prices (a subject on which NCNA have recently commented to us). I added that there was no difficulty with people who came on short visits. However, the 1978 figures showed no increase in the number returning to China within the period of validity of their original travel documents. I reiterated our hope that the September figures would show a marked decrease.

CONFIDENTIAL

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