Ć
a number
have
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danes of unfortunate consequences.
Λ
To begin with,
it will certainly lead to unwelcome speculation about the
Territory's future at the very time when we
the very time when we are engaged in
Government delicate negotiations with the Chinese aimed precisely at removing any such doubts. This speculation could in turn
create uncertainty and undermine the business confidence that
is absolutely vital to the Territory's very existence.
A slump in Hong Kong's economy would not only
cause suffering to the people of Hong Kong (for whose well-
being the British Government is of course responsible), but would also affect British interests. Hong Kong is second only
to Japan as a market for British exports in Asia outside the
Middle East, and there are substantial British investments in
Hong Kong. We also have a contingency commitment to Hong
Kong Government pensioners that could run into thousands of
millions of pounds, and, notwithstanding the formal position
on rights of entry into the UK, we would certainly face some
very embarrassing immigration problems if the continuation of
Hong Kong in its present form were to be called into question.
There are also political dimensions to the problem.
Our relations with the Chinese could be jeopardised, since
they have if anything an even stronger interest than we
in maintaining the prosperity of Hong Kong. They would not understand our introducing apparently unnecessary changes
might
that with put that prosperity at risk. In Hong Kong itself,
what would be seen as
as a demonstration of Britain's failing
interest in the Colony could upset the delicate balance that
the Government have achieved with the Communist left there.
I realise that this scenario puts the case at its
dramatic worst, and that it is unlikely that a mere change
in title would in itself lead to the collapse of Hong Kong as
a self-sustaining free enterprise economy. But the risk that
the change could start a snow-balling process as described
above is nonetheless real. It seems to us therefore that the
Governor is right to argue that, since there is apparently no UK interest at stake, Britain should not insist on exposing
Hong Kong to this risk.
•
I should make it clear that the Governor is not
proposing that the title CUKC should be retained for all those
who now come under this heading, with the new British Citizen-
ship and British Overseas Citizenship as sub-categories for
/ certain
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