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certain respects at least as
as business visitors are concerned. The main effect of this relaxation was to remove the previous numerical restrictions on the number of Soviet and East European businessmen visiting the territory. The reason for liberalising the regime was to try to increase Hong Kong's trade and investment links with East European countries and to strengthen Hong Kong's role as an international business centre. In the light of subsequent developments in Eastern Europe, the Hong Kong Government are now reviewing their visa policy again to see if further liberalisation is justified.
4.
As far as the opening of a Hungarian trade office is concerned, however the Governor considers that a gradual and incremental change, resulting initially in larger numbers of Soviet and East European business visitors to Hong Kong, is preferable to any sudden break with the long standing practice of not allowing any
This permanent Soviet or Eastern European presence in Hong Kong. view is based on the following considerations:
(a) The Chinese are still likely to be concerned about a permanent East European presence in Hong Kong, particularly given their sensitivities about recent changes in Eastern Europe.
(b)
(c) If the Hungarians were allowed to open a trade office, this would set a precedent for other East European countries.
(d) Although there could be economic advantages in allowing the establishment of a Hungarian trade office these would be relatively insignificant. Hungary currently accounts for only (0.02% of Hong Kong's total trade which is low even by comparison with other East European countries (GDR, Poland, etc).
5.
For all these reasons the Governor has concluded that there is
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THE ORIGINAL HAS BEEN RETAINED
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SECTION 3 (4) OF THE PUBLIC RECORDS ACT 1958