CONFIDENTIAL

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RECORD OF A CONVERSATION BETWEEN DR D C WILSON, POLITICAL ADVISER, HONG KONG GOVERNMENT, AND MR ZHANG CANMING, DEPUTY MINISTER OF FOREIGN AFFAIRS AT THE MINISTRY OF FOREIGN AFFAIRS ON 23 NOVEMBER 1979

Present:

Dr D C Wilson

Mr T JB George

Mr Zhang Canming

Mr Zheng Yaowen, WED, MPA

1. After courtesies Dr Wilson recalled the improvement in relations between Hong Kong and Guangdong and instanced developments in communications actual and in prospect. Mr Zhang recalled the friendly relations between the United Kingdom and the People's Republic of China and their common view on international and strategic issues, and referred to co-operation between Hong Kong and Guangdong on many issues. Despite economic difficulties caused by the Gang of Four, China's economy would make progress. Special economic regions had been established in Guangdong. In answer to a question by Dr Wilson, Mr Zhang said that the status of special economic regions encouraged local initiative, albeit with some central guidance (but he gave little insight into the concept).

2.

Dr Wilson raised the problem of immigration into Hong Kong, which had brought an increase of population of 100,000 in 1978 and of 150,000 so far in 1979. Illegal immigration was currently the more serious issue, optimism following an improvement earlier in the year having proved misplaced. Prime Minister Hua Guofeng had given assurances in London about additional measures to control the flow, and there had been more detailed talks between Huang Hua and Lord Carrington. But the previous week's arrests had averaged some 300 a day. Dr Wilson said that on legal immigration genuine transients and visitors from China were welcome, but of the latter only 3% returned. The Hong Kong Government wanted a return to the historic levels of 1975/76`and

early 1977, when the flow was 2000 a month or less; which could be absorbed. The social problems arising from immigration could lead to economic difficulties which might impair Hong ong's

/ability

CONFIDENTIAL

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