4.

Mrs Laidlaw questioned China's desire to see Hong Kong succeed. Mr McLaren said that China had a strong interest in the success of

the 'one country, two systems' concept. Not only were there overwhelming economic considerations to be taken into account, but Peking was also looking at Hong Kong as a model for China/Taiwan

reunification.

5. The Archbishop asked if the UK would continue to play a monitoring role after 1997. Mr McLaren pointed out that the JLG would continue until 1 January 2000. After that, there would still

be considerable UK interest in Hong Kong. The Government would have no compunction in protesting, if necessary to the UN, if China reneged on its commitments in the Joint Declaration.

Nationality

6.

Rev Dr Morgan stressed the need to maintain Hong Kong as it is. He wondered whether the Government's nationality package was enough

to persuade Hong Kongers to stay. Mr McLaren said that Hong Kong people were realistic enough to see that demands for more passports were simply not practicable. The Government's aim now was to implement the scheme as quickly and as fairly as possible.

Mr McLaren acknowledged that the measures would not stop emigration to third countries but he hoped that key personnel would be reassured and would stay on after 1997. He could understand the reactions of the Chinese Government, but hoped they would be tempered down in time. The Government had to consider the best interests of those Hong Kong people who stay after 1997.

7. Mr McLaren mentioned that we had sought to persuade other

Support governments to take action to what we were doing. We had, for example approached countries like the US and Japan, which had major investments in Hong Kong. We had also tried to interest EC partners in issuing passports to employees of firms incorporated in their countries. There had been some response, but most countries found it difficult to give proposals to people who were not

resident, or to cater for

defered immigration.

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