3.

CONFRIEND!!

On the question of further Canadian Government sponsorship, Dr MacGuigan stated that this had not yet been

discussed in Cabinet but he was not optimistic. The Governor

asked whether it would help to send Voluntary Agency

representatives to Canada to interest private sponsors and

Dr MacGuigan said that he would discuss this with the

Minister of Immigration.

4.

Replying to a question from Dr MacGuigan, the Governor

said that the change in policy by the Vietnamese Government at

Geneva had been dramatic. He was satisfied that they had generally kept their promise to control departures as much as

they could. There was no evidence of a change in attitude

and the recent increase in arrivals in Hong Kong was seasonal.

Hong Kong/China Relations

5.

In reply to Dr MacGuigan, the Governor explained that Hong Kong's political and economic relationships with

China had evolved in recent years and the part the Chinese saw Hong Kong playing in their modernisation programme. As regards Hong Kong's future, the Chinese accepted the need to maintain confidence and had made re-assuring noises but had not yet focused on the details of the long term problem. Relations between Chinese and British officials in Hong Kong were relaxed

and entirely satisfactory.

Hong Kong/Canada Trade

6.

The Governor referred to the chequered history of

trade relations and particularly the problem of the 25% mark up arbitrarily applied by the Canadian Government to the freight on board value of Hong Kong clothing imports prior

to the levying of duty. This unilateral restriction was a

cause of concern and he understood that it would be raised by

the Director of Trade and Industry in discussion with Dr

MacGuigan. The latter said that he looked forward to discussing

CONFIDENT AL

/the....

3.

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