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crucial date. Sir Jack Cater said that what was proposed was an essential first step and would be seen in Hong Kong as a good move. Mr Li Fook-kow (Home Affairs) said that to do nothing would have the worst of all possible consequences for confidence.
7. Mr Walden asked whether the Chinese might seek a quid pro quo by asking for official status for their representative in Hong Kong. Sir Murray Maclehose said that the position of the repre- sentative had gradually changed anyway. Lord Carrington thought that any change in official status would be an acknowledgement by China of the status quo. Sir Murray Maclehose said that if there were any formal change in his status the Chinese would seek to describe their representative as a "special representative". There would be a constant danger of him becoming involved in internal affairs.
8.
In further discussion of the Leases issue, Lord Carrington said that he assumed the Chinese would feel obliged to say some- thing about what we were proposing though presumably since they did not recognise the treaties there could be no loss of face involved in allowing them to continue. Dr Wilson thought the Chinese likely to repeat their position on the inequality of the treaties. But provided they went no further than a standard re-affirmation of their view, this would create no problem.
9. Lord Carrington asked whether, by the time the Leases expired, the proportion of foreign exchange earned by China in Hong Kong was likely to have diminished. Sir Murray Maclehose said that this depended on the pace of modernisation and that the Chinese capacity for absorption as well as creation remained enormous. The Chinese would wish to retain the expertise of Hong Kong and Deng Xiao Peng had remarked that the capitalist system in Hong Kong could continue alongside the social system in China.
IMMIGRATION
10. Mr Davies said that the number of illegal immigrants into Hong Kong had risen to a peak of 14,000 in May. The figure in June 80 far peaked at 12,000. 850 had been arrested in one day though the current rate was less than 150 a day, partly because the entire garrison had been devoted to this particular task and partly because of the presence and activity of the 42nd Army across the border. The current ratio of capture was about 1:1.
11. Sir Murray Maclehose said that legal immigration was now running at about 150 a day. This was still too high and we would have to keep on prodding. Mr Cradock thought that the Chinese would be strict on illegal immigrants and had told him that they would be. The authorities in Guangdong were required to report the figures every day to Peking. The Chinese accepted their responsi- bility and the need to keep a grip on the problem.
We had put a
number of ideas to the Chinese and by continuing to do so we would remind them that the problem remained a drastic one. Lord Carrington asked whether it was not humiliating for the Chinese to have to acknowledge that so many of their people wanted to leave.
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