CONFIDENTIAL

4.

11.

Theoretically it is open to us to say that we will only legislate for the Visa Office if we can get agreement on this other question of immigration. This has the attraction of a quid pro quo. But the linkage would be difficult to establish and the Chinese would presumably argue strongly that the two matters are in no way connected. We would then risk leaving both problems as unresolved and contentious, with the additional disadvantage that, if we finally agreed to de-link the two, we would be seen to concede yet again to Chinese pressure. Our present feeling therefore is that, if we pursue the legislation idea, we should talk at the same time to the Chinese about this other unresolved problem, but should not seek to link the two indissolubly together.

12.

To go any further with proposals for legislation would need the approval of Exco. Preliminary discussion has shown that Unofficials are none too keen on the idea. They are particularly, and understandably, worried about the possibility of the Visa Office expanding its activities to e.g. issuing passports. They probably also see no reason why we should give ground without a corresponding concession by the Chinese. Furthermore, in the present climate, they are all too likely to tie this together with all the other matters of concern such as the Nationality Bill and the MFA etc., and say that this is a bad time at which to give the public an impression that we have conceded a forward move to China. Exco approval for legislating to provide privileges for the Visa Office cannot therefore be assumed. Nevertheless the Governor thinks that Exco objections can be overcome, and the Visa Office defended, on grounds of growing tourist movement.

13.

Before going back to Exco we would be grateful for comments and advice from you and the embassy both on the question of general policy and on the details of what is proposed in the attachments to this letter.

Could you please send these by telegram since we will need to consult Exco in early June before the Governor's departure on leave, and any matter involving legislation requires two weeks' advance notice.

14.

The Governor has seen and agreed this letter in draft.

CC

R J T McLaren Esq

Far Eastern Department

M W Atkinson Esq MBE PEKING

eve

(D C Wilson)

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CONFIDENTIAL

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