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64.

The situation with regard to Vietnamese refugees in Hong Kong

deteriorated in 1987. Following the doubling of the number of

arrivals of refugees in 1986 compared with 1985, there was a further

increase of

per cent in 1987. In contrast, despite the major

effort made by Her Majesty's Government and the Hong Kong Government

to secure resettlement places for the refugees, the numbers leaving Hong Kong for resettlement in 1987 declined by

*

per cent. As

a consequence the number of refugees in camps in Hong Kong rose from

8,039 at the end of 1986 to

at the end of 1987.

65.

It is now clear that resettlement countries are becoming more

selective in choosing the Vietnamese refugees they are prepared to

accept. Most of them now insist that those they take should have close family connections with Vietnamese already settled in their

countries. This is creating a particular problem for Hong Kong, as an increasing number of refugees arriving in the territory are ethnic Vietnamese from North Vietnam, who have no family connections

in countries of resettlement. Many refugees in Hong Kong have already waited years in the hope of being resettled and as many as

3,500 of them have been in Hong Kong for more than five years.

66.

Her Majesty's Government and the Hong Kong Government, with

the assistance of the United Nations High Commissioner for Refugees,

will continue with their efforts to obtain more resettlement places

for Vietnamese refugees from Hong Kong. In addition it is important to pursue actively a long term solution which deals with the problem at its source in Vietnam. It will require a co-operative

international effort and considerable patient diplomacy to secure

this.

PUBLIC ORDER AND SECURITY

(a)

Defence Costs Agreement

67. The 1981 Defence Costs Agreement, which will expire in March

1988, sets out the understanding between Her Majesty's Government

and the Hong Kong Government on the costs of the British Garrison stationed in Hong Kong, and on the contribution which Hong Kong

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