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b) Hong Kong represents a continuing defence commitment;
c) responsibility for the Territory affects our international
finter
relationships, particularly with China, but also in the
trade field, eg over textiles.
Taking Steps to Leave Hong Kong
9. Apart from international repercussions which would not in
themselves be conclusive the difficulties would be:
i) Our obligations to the population;
ii) Probable demands for substantial immigration to
Britain and other countries;
iii) Collapse of business confidence;
iv) Losses by British and foreign firms;
v) Difficulties of administration during a transitional
period.
Effect on loyalty of Civil Service and police.
Problems of law and order.
10. The balance is strongly against taking the initiative to
leave.
Possible Chinese Moves
ན་
11. From a range of options on a future system for Hong Kong the
Chinese might work towards a form of 'special zone' within China
but with a separate economic system or currency. But it is too
early to forecast their moves at this range.
IMPLICATIONS FOR HMG
12. Any special arrangement' for Hong Kong would cause some of
the following problems for HMG, both in the transition period
and in the long-term depending on the degree of British involve-
ment:
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