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(d) to promote long term British commercial and political objectives in the territory, including the establishment of

a Consulate General.

3. All of these tasks would be facilitated by positive

cooperation from the Chinese Government, and conversely,

would be made more difficult without such cooperation.

Airport

4. Hong Kong's proposed Port and Airport Development Strategy (PADS), originally announced in October 1989, has

been the object of difficult discussions with China.(Chinese support needed to ensure private investor confidence about commitments straddling 1997). Hong Kong's international

reputation has suffered from the protracted failure to

agree, a Chinese propaganda campaign and widespread concern

about the role which China sought in the administration of

Hong Kong before 1997. The initialling and publication on

4 July of a Memorandum of Understanding should at least partially restore confidence. We hope the Understanding

will enable us to secure a more constructive attitude from

the Chinese on other matters. (Failure to agree would have

led to confrontation and a Chinese withdrawal of cooperation

across the board.

Right of abode schemes

5. The British Nationality (Hong Kong) Act 1990 provides for the issue of 50,000 UK passports, to help anchor key Hong Kong people in the territory. We have been lobbying

extensively for other countries to provide similar forms of

assurance to Hong Kong people. The United States

Immigration Act 1990 includes the following helpful provisions:

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