CONFIDENTIAL

(a) refuse to recognise citizenship and right of abode conferred under the British nationality package and under

similar arrangements to be announced by other countries following approaches by the British Government;

(b) refuse to recognise renunciation of Chinese nationality except in cases where applicants meet the criteria set out in the Chinese Nationality Law (CNL). Accordingly they would regard most beneficiaries of the nationality package and

similar arrangements by other countries as continuing to be

Chinese nationals;

(c) refuse to recognise any entitlement of such persons to consular protection from Britain and the other countries

involved;

(d) refuse to allow people to travel on their British passports

obtained under the scheme;

(e) intensify efforts to identify and groom Hong Kong residents

who are acceptable to them politically as candidates for important official and representative positions in future;

(f) consider the possibility of transferring personnel from the

mainland. They have also suggested that the Hong Kong Government might try to attract Chinese students who have stayed in Britain or the USA rather than return to China following the June 1989 crack-down.

8.

The Chinese would be on doubtful ground legally in some of the above measures, including their obligations under the JD. But they may feel justified in taking measures that contravene the JD on the pretext that these were legitimate responses to

an alleged British violation of agreed arrangements. The Chinese may also find themselves in practical difficulty in distinguishing between British passport holders under the

Scheme and others.

CONFIDENTIAL

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