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population density in Asia and had responded to this by reducing its natural population increase to less than 2% per annum. Hong Kong was now faced with an annual population increase of 8 - 9% mainly as a result of immigration from China. The result of this had to be a lowering of the social wage.
5. Mr Blaker stressed the great concern the Government had over Hong Kong's problems and said that it was doing all it could to get the international community to accept its responsibilities.
6. Mr Haddon-Cave said that public opinion in Hong Kong was hard- ening rapidly and the general view was that the boat people should be put on boats and sent back to Vietnam. The general opinion was that HMG had persuaded the Hong Kong Government that, if it acted as passive receivers of these refugees and treated them humanely, Hong Kong would get a fair deal, or even preferential treatment, from resettlement countries. As a result, Hong Kong had become a magnet and was not getting a fair proportion of resettlement places in third countries.
7. Mr Blaker asked about the present state of the Hong Kong economy. Mr Haddon-Cave said that it was a double pity that Hong Kong should have the refugee problem at this time. This was became of the constraints on public expenditure he had had to introduce in the Budget. He then explained the background to the present situation and said that he was confident that it would soon rectify itself. The growth in trade deficit would continue but would probably be only 2 percentage points higher as a proportion of imports than last year.
8. Mr Blaker asked whether there were any other points. Mr Haddon- Cave said that he looked forward to the Minister's next visit to
Hong Kong. Such visits were important and the fact that there had not been any in recent times had attracted adverse comment in Hong Kong.
9.
The meeting ended at 4.30 pm.
Distribution: Mr Cortazzi
Mr Murray
SEAD
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