Morris Esq

5 January 1990

they must already have a close connection with this country. This would not help the people we want to keep in Hong Kong who will be selected on the grounds of the continuing value of their service to Hong Kong and not on whether they have amassed a particular capital sum."

Also we would prefer you to delete paragraph 9. This package is not relevant to the risk that there might be a refugee crisis, which depends entirely on the perceived attitude of the Chinese at the time of the handover to the Chinese. There is no point in raising this spectre in the reply. If, however, you want to keep some of the sentiments in paragraph 9 of the draft, we should like it to be amended to read as follows:

119.

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As to the argument that we may be betraying our commitment to limit immigration far from it. One of the considerations uppermost in our minds was the need to take early, decisive action to limit possible future immigration claims. If we were not to act now to restore confidence in Hong Kong and things went wrong as a result, many people would look to us as the former colonial power to shoulder the burden of making a suitable response."

Yours sincerely

S. McCulloch.

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VIVIENNE DEWS

B2 Division

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