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only it it

is stolen goods.

in Hong Kong was well received.

I found the business community

bullish about the prospects. But they were worried about the impact of the US/China trade rows, turbulence in Japan, the

world recession and developments in the EC on Hong Kong's

prosperity. There was considerably frustration that the airport project was still stymied.

6. I spent some time discussing law and order and joined in an anti-smuggling expedition. I was previously unaware of the extent of the resources which are being used to contain

smuggling. This is rightly an important priority for us and should remain so. Uninterrupted smuggling could cause a massive

haemorrhage in Hong Kong's wealth. People expect to see an overall increase in crime and corruption in Hong Kong in the

short term.

?

really?

7.

Although I promulgated no particular message, there were no

difficulties with the press. I emphasised that I shall pay regular visits to Hong Kong, even when there is no specific

business to announce.

VIETNAM

8. It was striking in Hong Kong that the issue of Vietnamese migrants was much less salient than on my previous visit. But it will be important to press ahead and maintain regular ORP flights in support of UNHCR's Voluntary Return Programme to

reinforce the message that we are intent on clearing the camps. This was a message I also carried with me to Vietnam. It was well taken; and there was no pressure for a review after the next ORP flight on 10 October. I was able to meet some returnees from Hong Kong, who were all making good progress.

9. This was the first bilateral visit for some time when repatriation was not the major issue nor a matter of

CONFIDENTIAL

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