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17 DEC 1986

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Mr D H Gillmore

W37 233 3579 31 October 1986 Dr Wilson

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THE HONG KONG ASSOCIATION

15 DE 1986

1.

ASTRY

In the

Thank you for your oral, briefing on the Hong Kong Association and its members before my lunch with them yesterday. event, Mr John Swire was not there and the occasion was hosted by Mr Henry Keswick

2. As you predicted, our discussion was dominated by two issues: the passport/right of abode matter and the question of direct elections. On the former, there was the usual, somewhat special pleading. I made it quite clear, however, that HMG, for reasons which they would understand only too well, could not be seen to be touting for capital leaving Hong Kong, but we were, of course, quietly delighted if owners of capital in Hong Kong who had decided to move their money out put it in the UK rather than elsewhere. The matter of passports was a different question and raised issues of significance going far beyond Hong Kong affairs. They would understand well that there had to be a policy of world- wide application. I said that I thought that the reaction of other countries with whom we had now discussed the BM(0) passport had been reasonably favourable and encouraging.

3. Predictably, the HKA members present took a heavily negative view of direct elections. Indeed, Mr Henry Keswick opened this discussion by saying he thought the whole thing a rotten idea! I said that they could be assured that we were deeply aware of the sensitivity of the Chinese on this matter and of the possible risks to confidence in Hong Kong. I added that I thought the question was one of finding a number which would satisfy the advocates without disturbing the Chinese or disrupting economic confidence. On the whole, I think they accepted that.

4.

He could be a

Mr Morris from the Home Office spoke, I thought, extremely well and cogently on the passport question. I will try to get him to lunch when I get back from Australasia. useful ally.

RECEIVED IN NEGISTRY

VINDOX

7 NOV 1986

CISTRY

chor Taken

D H Gillmore

RESTRICTED

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