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deserves; and that our long-term objectives in China, especially in

the commercial field, are given prioirity over our responsibilities

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for Hong Kong.

Virtually every issue tends to be viewed in this light, however implausibly. Examples which are variously adduced by our critics to support their case include:

the decision to introduce direct elections to LegCo in 1991 rather than 1988;

the limited scale of our resettlement assistance to Vietnamese

boat people;

the hard bargain driven by MOD negotiators on the sharing of defence costs;

the imbalance between British and Hong Kong carriers on the London-Hong Kong air route;

incidents when Hong Kong travellers are refused entry to the UK, or encounter other difficulties with the immigration authorities;

(potentially) our coolness over the idea of a world exhibition in Hong Kong in 1997.

It was the aim of the Secretary of State, during his own recent visit to Hong Kong, to provide reassurance that our commitment to the territory and its transition to Chinese sovereignty remains firm; and in particular that Hong Kong's interests are not being subordinated to our wider objectives in relation to China. He made some headway: but much scepticism still lingers.

9.

In the meetings with ExCo and OMELCO Councillors can be expected to revert to the principal issues raised with the Secretary of State, namely Vietnamese boat people (Brief No 7), nationality and immigration quesitons (Brief No 12) and the Basic Law (Brief No 5). On the boat people the introduction of the new policy, with HMG's blessing, will have dealt with the most immediate concern, but attention may re-focus on a new resettlement commitment by HMG. On the immigration problems there is little new to say: the

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