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37
GOVERNMENT HOUSE
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21 November 1989
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Having read Alan Donald's letter of 25 October, I thought it might be helpful if I sent you my thoughts on policy towards Taiwan from Hong Kong's point of view.
Taiwan's importance to Hong Kong in the economic field is great, and growing. It ranks as our fourth largest trading partner, after China, the US and Japan. It is particularly important to us in entrepot trade (worth HK$35.4 billion in 1988), tourism (in 1988 19.6% of our tourists came from Taiwan) and imports retained for use in Hong Kong. This year (January - September), for the first time, Taiwan has provided more of our retained imports (10.5% or HK$20.9 billion) than China (9.9% or HK$19.6 billion).
It is an interesting reflection on Chinese attitudes that Xu Jiatun, when I saw him earlier in the year, asked for my assistance in facilitating the granting of multiple entry visas for Taiwan businessmen. Since then, and as a result of the slump in hotel occupancy, we have been pressed by the Hong Kong Tourist Association to grant visa free entry of up to seven days for tourists from Taiwan. After reviewing our immigration procedures for Taiwanese we are now speeding up the processing time for multiple entry visas. for businessmen, and extending their validity from six months to one year. I see no prospect, however, of moving to a system of visa free visits by tourists: by doing so we would lose very necessary political control. At present sponsors have to sign undertakings that those concerned will not engage in political activities when in the territory. In the current climate of our relations with China we cannot afford to relax this requirement. Short of that, however, we are also speeding up the processing of tourist visas.