E
BACKGROUND
CONFIDENTIAL
References: A. Congressional Resolution concerning establishment of
multilateral initiative for Hong Kong, 14 November.
B. Washington telno 164.
1. The United States has a large economic stake in Hong Kong's continued prosperity. The US is the largest investor in Hong Kong's
manufacturing industry in cumulative terms (US$7.7 billion in 1987)
although it has recently been overtaken by Japan in terms of annual
investment flows. It is also Hong Kong's largest export market.
2.
Following the announcement of our nationality package on
20 December, the Embassy in Washington have been lobbying the US
Administration to encourage them to take comparable measures. The
US Administration recognise the need to prevent an exodus of key
personnel, although the US also has a long tradition of encouraging immigration. The State Department has for some time been
considering ways of encouraging Hong Kong people to stay in the
territory, including the issue of passports to locally engaged staff
of the US Consulate-General and to key employees of US firms.
3.
The House Foreign Affairs Sub-Committee on East Asia and the
Pacific (chaired by Congressman Solarz) held a hearing on the future
of Hong Kong last November and adopted a Resolution stating that
Congress would welcome UK leadership in developing a multilateral
initiative which would provide "a substantial number of Hong Kong
people with a right of abode outside Hong Kong that would permit
them to remain there without forfeiting that right.
4.
When Congressman Solarz saw the Foreign Secretary on 9 January,
he said that he thought legislative action could be taken by the end
of this year and that there was a realistic possibility that up to
20,000 visas a year might be available for Hong Kong people thereafter. Congressman Solarz also suggested that a British
official might testify before his sub-committee. The Embassy in
Washington have advised that this might create a precedent which
could cause us difficulties if we were asked to appear before
MAXAEW (4)
CONFIDENTIAL