2.

I recognise that your assessment is that accepting only the family reunion cases would not enable you to bring pressure to bear on other countries to increase their offtake. Nevertheless, the family reunion cases would not be a negligible contribution to the problem, and I hope that it would provide a basis for approaching other countries. If other countries are not impressed by this initiative, there must be some doubt whether they would be moved by a commitment of an additional 500 a year. I understand that recent reports from the Governor of Hong Kong suggest that the Australian & id American attitudes to resettlement are hardening and I fear that we may have to face the prospect that Hong Kong's problems may not be resolved by the traditional means of resettlement in the West.

This seems to me to point to the need to reassess some of the assumptions that are generally made in this area. I would not ask you to consider the option of compulsory repatriation to Vietnam, but I do think that there is a strong case for reviewing whether more could be done to promote regional resettlement within South East Asia, which would be likely to be a much more satisfactory solution for the Vietnamese themselves, on ethnic, language and cultural grounds.

Even allowing for the fact that Hong Kong, like Britain, is very overcrowded, it could itself make a contribution to an approach of this kind, and I strongly support your intention of pressing the Hong Kong Government to resettle some of the ethnic Chinese from the open camps. They are after all already free to work in Hong Kong and to recognise what is already the reality of the situation should not give rise to substantial additional pressures.

I had hoped to be in a position to reply formally to SCORRI before the recess. Given the difficulties that the Immigration Rules changes are likely to give rise to in the next few weeks, I do not think that it would be politically sensible to announce at the same time another decision that would result in additional immigration, even of the family reunion cases. My present intention, therefore, is to defer replying to SCORRI until after the recess. David Waddington has spoken to John Wheeler about this, who fully understands our political difficulties and has also explained the position to Richard Luce.

HKK 24315

RECEIVED IN REGISTRY

18 JUL 1985

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