12. Many of the politically aware in the community, including

prominent democrats, initially acknowledged and expressed

satisfaction with the progress made in the various BLDC special groups to amend unsatisfactory aspects of the draft Basic Law. Unfortunately this positive initial response was almost immediately

overshadowed by the controversy over the Louis Cha formula.

EMIGRATION

13. The number of visas issued to Hong Kong residents for emigration purposes is likely to total 46,000 in 1988, as compared to 39,000 in 1987. This figure is slightly lower than our earlier forecast (of 49,000) because of the administrative constraints which

limit the number of applications that consulates can handle. An annual outflow of this order is probably also close to the maximum sustainable supply of emigrants from Hong Kong who are qualified under current criteria. The three most popular destination

countries remain Canada, USA and Australia.

VIETNAMESE BOAT PEOPLE

14. The problem of the Vietnamese boat people remains a major headache, politically and administratively. The community as a whole has lost patience with the problem and sympathy with the

people involved.

The

15. There is widespread scepticism over the effectiveness of the screening policy, which faces two tests in the coming months. first will be the rate of arrivals, particularly in March and April when the weather gets warmer and the winds change. The second will If arrivals increase be progress in repatriation and resettlement.

and repatriation and resettlement programmes make no progress, we must expect renewed and fierce attacks on the policy of first

asylum.

16. The liberalization policy for refugees has been widely criticised and misunderstood, particularly in Tuen Mun, where local political leaders have fanned existing antagonisms. Stories, mostly

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