From the Secretary of State

Foreign, and Commonscale of

London SWIAZD

Februar 1990

Dear Pehr

I found my meeting with you and Merlyn Rees on 17 January extremely useful. I am reflecting on your comments and suggestions.

You asked about the rationale for the figure of 50,000 heads of household. The Hong Kong Government estimate that there are about 320,000 people in the categories of professional, technical, managerial and administrative personnel. Most of them are graduates or have some kind of professional or other qualification. Some 10,000 of them are leaving annually by definition some of the best people in these important categories. These are the key people on whom Hong Kong's prosperity and good government depend. If this trend continues by 1997 a very large number of them will have left. Their talent and expertise cannot be fully replaced from within

the local labour market. The consequences could be grave.

Our judgement is that providing assurances to 50,000 of these key people would have a very significant effect on this problem. Our scheme would seek to select people whose continued presence in the territory was particularly important, focussing principally on employment categories which suffered from particularly high rates of emigration.

The Rt Hon Peter Shore MP

/You

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