CONFIDENTIAL

HMG have clear strategy to tackle problem:

seeking to bring

international community to accept logic of Comprehensive Plan of

Action, ie repatriation of all those screened out.

Final decision on repatriation not simple. Need to balance pros

and cons. Despite all our efforts to persuade them, international

reaction will be adverse. That would affect international

(especially American) perceptions of Hong Kong at time when

international support for Hong Kong generally is needed.

Must also remember need to retain cooperation of Vietnam. Cannot proceed without this. Essential that when we do repatriate

non-volunteers operation proceeds smoothly.

(b) Nationality

Well aware that package on nationality anxiously awaited in Hong

Kong.

Much progress already made. But time still needed to complete

our work. Would not help Hong Kong if we were to rush decisions and get the details of the package wrong.

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Already clear that it will not be easy to produce a package which

satisfies all requirements. But we will do our best. Will be as generous as we can within political and practical constraints.

(c) Basic Law and democracy

Not much time left in which to influence content of Basic Law.

Must use this effectively.

Our job (and yours) to persuade Chinese to produce Basic Law which commands confidence in Hong Kong.

Political structure crucial element.

Where does consensus in

Hong Kong now stand?

NABAAV 2

CONFIDENTIAL

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