CONFIDENTIAL
Hong Kong or the other resettlement countries that we are taking the problem seriously unless we agree to a further intake of Vietnamese refugees. I do not think that Tess than 1,000 in all would serve any purpose. I am also looking at how to follow up with the UNHCR on their co-operation with the Hong Kong Government.
(b) People are hoping that your talk with Douglas Hurd will produce something positive on the treatment Hong Kong passport holders receive on arrival here. I will have a further word with Tim Renton. We must try to get an improvement. As you found yourself, feeling on the issue is pretty strong.
And clarity, from
(c) We may have some minor trouble in the Finance Committee of Legco over the DCA. Martin Lee is obviously out to score some points and the issue was raised at some length at my press conference. The Hong Kong Government have taken some preventive action, however, and Sir S Y Chung and Lydia Dunn were sure that the DCA will be approved in the end. It is no bad thing that the MOD should be aware that it is, as we had said, an issue of considerable local sensitivity.
But
(d) There is no underestimating the seriousness of the brain drain from Hong Kong. Middle management is being badly affected. I am frankly not sure what we can do about it. the Hong Kong Government are looking at ideas to woo people back; and the Chinese are also taking the problem seriously.
11. My visit coincided with events to mark the JLG's acquisition of a "principal base" in Hong Kong. I heard no suggestion that the permanent stationing in Hong Kong of the Chinese team had caused local concern. I visited our own new offices possibly (as one might expect in Hong Kong) the best I have seen anywhere.
J
12. Hong Kong's eyes will now be focussed on getting some results from the undertakings you and I both gave to look into their latest list of problems. I hope that we will be able to deliver. Confidence remains eggshell thin, and we need to continue to demonstrate that we have not lost interest. At the same time, I did suggest to Conservatives Abroad and others that they should stop working themselves into such a state of gloom that Hong Kong risks losing the special qualities that make it prosper, and that give the Chinese the best possible incentive to preserve and copy existing institutions.
THE
IVEN
10
diftine
/13.
CONFIDENTIAL