6

clearly implicit in the reply that the Chinese Foreign Minister gave to

a question about Hong Kong that was raised during his press conference

in London on 2 November when he said:

'The lease is due to expire in 1997. So there is still time.

The basic attitude of the Chinese Government in this matter

is that when the time comes for resolution, we will take into

consideration the interests of investors, so that their

interests will not but hurt. This came up in the talks yester-

day and both sides agreed to keep in contact on this matter.

Immigration from China

18.

This is a major preoccupation of the Hong Kong Government at the

moment. Over 280,000 immigrants have arrived altogether in the past two

years a 6% increase in the population. Many of them arrive legally:

the Hong Kong Government at present impose no controls over those whom

the Chinese permit to travel to Hong Kong. But they have made it known

that they would like the numbers kept down to about 50 a day. In the

second half of 1978, as a result of liberalisation in China and the

greater freedom of movement that went with it, the daily average rose to

over 300. In response to our representations, the Chinese have brought

the figure down to around 160, but have so far been unwilling or unable

to bring it any lower.

19.

The Chinese authorities do seem to share our concern to prevent

llegal immigrants from crossing the border into Hong Kong. This problem

reached a critical level in December, with over 500 people a day being

arrested at the border and returned, and at least as many again reckoned to be evading arrest and entering Hong Kong. At the beginning of

January, however, the Chinese Government introduced new measures of con-

trol (as Chairman Hua had promised Mrs Thatcher in November would be

done), and the figures so far in January are substantially lower. On the

Hong Kong side, the garrison has been temporarily reinforced to enable

it to cope with the increased burden of border control.

Anglo-Hong Kong Relations

20. It is the British Government's policy to promote and protect Hong

Kong's international interests, but not to intervene in the internal

government of Hong Kong. If questioned on Hong Kong's internal affairs,

we seek the advice of the Hong Kong Government on how to reply and almost invariably defend their policies.

/21.

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