Points to Make

1.

Matter for HMG.

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RECEIVED IN REGISTRY

10 APR 1990

DESK OFFICER

INDEX

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REGISTRY

Action Taken

But concerned at sudden Chinese

reaction which seems to misunderstand HMG motives and aims. Over-riding concern is obligation to maintain stability and prosperity of Hong Kong. No other motive: indeed a difficult political decision in UK.

2.

UK measure aimed at combatting emigration of talent by encouraging key people to stay.

3.

Necessary move. Resignation/emigration serious problem in Civil Service as well as private sector.

4.

Entirely consistent with obligations under JD and associated memoranda.

5.

No surprise. UK ministers have referred to scheme for months. So far Chinese view correctly said British citizenship matter for HMG. Hope you will revert to that position.

6.

Many in Hong Kong already have foreign passports. Hong Kong an international business centre. UK move not designed to retain inappropriate British influence after 1997 or 'internationalise'.

7.

Other countries asked to introduce similar packages for same reason: maximising stability and confidence. If they do so, beneficiaries likely to be overwhelmingly in private

sector.

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