Line To Take

UK Ministers have stated categorically that Bill is not aimed at HK. Assurances given that UKG will maintain its traditional links with and responsibility towards HK. Bill not relevant to 1997. Hope for some flexibility in wording on cover of HK passport; no decision yet. Strong representations by HKG, made since publication of the Green Paper in 1977 through all available channels, including UMELCO visit to London, visit by Messrs. Whitney and Lyons and H.E.'s trip.

3

NT LEASE

Position

Line To Take

: The press have contained an increasing number of promising forecasts of the future of HK, the majority saying that some solution would be found, even if this meant ignoring the lease. On the latest assurance of HK's future by Deng Xiao Fing during Lard Carrington's visit to China, some said residents should not be worried about 1997, while others said Deng's comments were nothing new and insufficient to assure long-term investments. There were also strong pleas for the position tà be clarified now.

The Comments made by Deng were consistent with assurances given by Chinese authorities at all levels and with her current policies and modernisation programmes. Judging from recent statements by prominent investors such as Sir Y.K. Pao and the HK Bank Chairman, 'confidence' in HK does not appear to be a major problem. HK/China relations have never been better.

ILLEGAL IMMIGRATION

Rosition

Line To Take

: The number of border crossings continued to decline from last

November until March. The subsequent increase was due to an improvement in the weather, the spreading of rumours of an impending amnesty and the increased activities of forged ID card racketeers. Still no firm evidence of submerged society. Wanderers Association and HK Free Youth Encouragement Club (Taiwan connections) only active opposition groups..

No chance of amnesty. Effectiveness of policy evidenced by new arrivals giving themselves up after failing to obtain a job and other services. Plans in hand for new, more secure ID card. Courts have warned of tougher sentences re: forgeries. No set-up in detection measures.

ARMED IIS

Position

There were 3 incidents in 5 days involving IIs who arrived by train carrying starting pistols, firing caps, a knife and firecrackers. A total of 11 starting pistols have been found so far this year. This sparked fears of a new type of crime wave, associated with a recent increase in the qumber of arrivals. Many called for appropriate measures including tougher penalties. Concern increased after a spate of successful, highly-organised goldsmith shop robberies involving guns (one arrested robber had arrived from China only six days before). It was reported that Big Circle Gang' members had increased significantly and that they were also responsible for recent series of bombing incidents. attention was to the apparent ease of smuggling cheaply purchased guns from China.

Some

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