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boy for the EEC's impotence to act against more powerful and unrestricted suppliers such as the United States. Nothing could do more for Hong Kong/United Kingdom relations than for the UK to be seen to protect Hong Kong's reasonable interests and her special position as a free market; nothing could do more harm than
the reverse.
UK/HK bilateral
8. We do not want another jolt to these relations in 1982. The combination in 1981 of the Nationality Bill and University Fees and the conclusions drawn of UK disengagement from the problem of 1997 were quite enough. It is ironic that these coincidental measures should have produced distrust of the United Kingdom with a government in power which has been so sympathetic to Hong Kong, and which is generally admired here. The Secretary of State's visit in particular, but those of other ministers also were welcome reminders of the underlying health of the relationship, and incidentally of the rapid growth of United Kingdom exports to Hong Kong.
9. The new UK university fees have halved the number of Hong Kong 1st degree students in the UK, and their prospect has reduced the number going to the UK for secondary education by two-thirds, and there has been a corresponding movement to North America. The Hong Kong Government will do what it can to reverse this trend which has serious long term implications both for Hong Kong and for UK connections with East Asia. But I do trust that if UK policy changes, Hong Kong will have equality of treatment with any territory benefiting from the change.
10.
The shock of the Nationality Bill has been absorbed for the time being. Future interest is likely to focus on whether passports, in addition to stating a bearer's citizenship, may describe him as "British Subject: Hong Kong, and he describe himself to Immigration authorities as 'British: Hong Kong". I obtrude these details because this issue is not dead, and will certainly come to life with a bang when the new act is brought into force and consequent legislation introduced here. I realise how complex and tedious passage of the bill must have been; I also acknowledge the consideration given to Hong Kong by the Home Secretary in its early stages,
/ but this
CONFIDENTIAL