THIS IS A COPY

THE ORIGINAL HAS BEEN RETAINED IN THE DEPARTMENT UNDER

SECTION 3 (4) OF THE

PUBLIC RECORDS ACT 1958

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question by asking other countries to consider taking similar

measures.

Chinese leaders are very

suspicious of our motives. It is unrealistic to expect the Chinese to support our package. Our aim should be to dispel their

suspicions to the extent that this is possible and to get them to say as little as possible in public. The Prime Minister may wish to

stress that

The package is not aimed against China and will not damage

Chinese interests Under the Joint Declaration, we have an

obligation to maintain the stability and prosperity of Hong

Kong. This is precisely what our package is designed to

achieve.

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The same applies to any similar measures which might be taken by other countries. Hong Kong is an international centre, with huge international investment. Its major trading

partners also have a strong interest in Hong Kong's continuing

stability and prosperity.

We decided to offer beneficiaries of the scheme full British

passports rather than some form of guaranteed entry because of

concern in Hong Kong that anything less than passports could easily be revoked by a future British Government and would

therefore not provide a secure assurance.

We appreciate that Chinese nationality law does not recognise

dual nationality. But we hope we can find a way to resolve

this difficulty.

It has always been clear from the Joint Declaration that certain top posts in the future SAR Government would be reserved for Chinese nationals. We accept that those who wish to reach these top posts will therefore have to decide whether to apply for British citizenship.

Another important area where the Chinese could help to promote

ALIAAJ

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