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racial animosity in the region against the Vietnamese, who now

constitute the vast majority of refugees awaiting resettlement

in Hong Kong.

8. I do not see a potential problem with the BDTCs in Hong Kong if we accept more Vietnamese for resettlement here. Public

opinion in Hong Kong will know perfectly well enough that we are

doing so reluctantly at Hong Kong's urgent request in order to

help Hong Kong. As Unofficials in Hong Kong have made clear,

it

is rather failure on the part of HMG to do what is necessary to

secure resettlement of the refugees elsewhere which will create

resentment. There has been a considerable ground swell of

popular opposition to the humanitarian approach the Hong Kong

Government has taken on the refugee problem while at the same

time they restrict severely the entry from China of those who

have close connections with the territory.

9. On timing, the delay you propose is not a simple matter.

You, David Waddington and Richard Luce have given assurances of

our urgent consideration of this problem, and a reply was promised in July. This general timing is well known in Hong Kong, where a reply is expected soon. There is considerable

speculation about what it will be. There are already rumours in

Hong Kong of a delay. I understand your reasons for wanting to

delay the response until after the recess; there is in any case

now not enough time remaining to do anything else. But I have

to say that such a delay will greatly increase suspicion about

HMG's intentions and criticism of HMG, and lead to further

lobbying of MPs. I would not be too worried about that if the

end result was a reply which was satisfactory from the Hong

Kong point of view. But a delay followed by an unsatisfactory

response would give us the worst of all worlds.

10. I am very worried about the situation which is arising, and would welcome the chance to talk to you urgently about it.

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/I should

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