CONFIDENTIAL

HONG KONG'S RELATIONS WITH THE UNITED KINGDOM

Another feature of the past year has been the evolution of our

relationship with the United Kingdom. Contrary to some popular

myths, this Government has for many years been left essentially free

to get on with the job of running Hong Kong by itself. We have sole responsibility for our internal affairs, such as education, social

welfare and medical services. For the past 20 years or so, we have

made all our own policy decisions in other important areas such as

the economy, trade and finance.

In the past

As a result, we have developed some interests which are separate

from those of the United Kingdom. Sometimes we have found

ourselves on opposite sides of the negotiating table.

year or two, for instance, we have had to negotiate about the

relative shares of costs incurred by the British Garrison in Hong

Kong and we have had discussions about the part the United Kingdom

plays in resettling Vietnamese refugees from Hong Kong. When this

happens, you can be sure that your Government argues hard on Hong

Kong's behalf.

We have also put forward a clear Hong Kong case on the nationality

issue. I have said that I understand and sympathise with the wide pead hope in Hong Kong that Britain will grant the right of

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the United Kingdom to all Hong Kong British nationals.

I have also said that, in my view, such a move, if it was possible

would have a very positive effect on confidence in Hong Kong, and

that the number who would actually leave would be small.

The British Government has said that it does not believe it is

possible to grant the right of abode in Britain to all Hong Kong British nationals. Instead it has promised a scheme under which the right of abode in the UK will be granted to some British nationals from Hong Kong. We have been assured that work is going ahead as fast as it can on such a scheme. I hope that the details

BIFABH

CONFIDENTIAL

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