CONFIDENTIAL

2

has also been some criticism, mostly in private, that the Government and

UMELCO have not been sufficiently vigorous or aggressive in representing

Hong Kong's case to KMG. Generally the "Gibraltar clause" has rekindled

concern about the need to underline the "Britishness" of Hong Kong CBDTS. Sir S.Y. Chung continues to advocate, and did so to the press upon his

return from London on 7 August, that the prefix "British National" should

be added to the citizenship title of Hong Kong CBDTS as a description of national status in their passports.

6.

UMELCO have, however, decided not to do anything precipitate until it becomes clearer how HMG propose to handle the "Gibraltar clause" and

its implications. The consensus was also that Hong Kong should adopt a neutral stand on special treatment for Gibraltar and should not oppose it

openly.

7.

The withdrawal of the Falkland Islands amendment and its likely reintroduction at Report Stage in the Lords have been noted without

comment.

HMG's Position

The FCO has stated that "there must now be a period of calm deliberation" and that a decision is unlikely to be taken until late September.

3.

Assessment

9.

Our assessment is that:

(a)

HMG may yet try to negative the "Gibraltar clause", either

at Report Stage in the Lords or, more probably, when the Bill returns to the Commons, but may not succeed in doing

50.

(b)

There is no possibility of Hong Kong being given identical

treatment to Gibraltar.

CONFIDENTIAL

/(c)

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