CONFIDENTIAL
6. Illegal immigration into Macau from China causes problems, although the numbers appear to have dropped.
Macau's relations with Hong Kong
7. Hong Kong interests have a large stake in the Macau economy and dominate in such areas as transport between Hong Kong and Macau and the casinos. Much of the money for proposed develop- ment projects can be expected to come from Hong Kong. There are signs, however, that Macau is anxious to reduce Hong Kong's influence.
8. Macau's practice in some instances of redirecting boats carrying Vietnamese refugees to Hong Kong has caused some anxiety.
Macau/EC
9.
The relationship between Macau and the EC after Portuguese accession remains to be decided in the negotiations between Portugal and the Community. It is clear that any request by Portugal for special treatment for Macau would face the Community with serious difficulties, notably over free movement of labour and textiles. Moreover it would be politically impossible for the UK to agree to Macau receiving better treat- ment than that accorded to Hong Kong. It is not yet clear what status the Portuguese will request for Macau. However, the Commission have pointed out that in the negotiations so far, Macau has only been discussed under the "external relations" heading and not under "customs union". This implies that Portugal may already have accepted that Macau will not be part of the Community after Portuguese accession. The Commission's view is that Macau should have the same status as Hong Kong.
January 1981
3
CONFIDENTIAL
Far Eastern Section Research Department
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