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overseas agreement officers who are permanent residents to

opt for transfer to local terms under certain conditions.

HKG would use the current definition of "permanent resident"

in the Immigration Ordinance to assess eligibility for

transfer.

5.

This proposal is not risk free. It is likely that:

local staff associations will oppose the change.

not all expatriate contract officers would welcome the

change as it would require most of them to naturalise as

BDTCs in order to become permanent residents.

- the Chinese are likely to demand consultation and oppose any unilateral action.

6. While I still believe that taking the initiative is the

preferred course of action, there is the risk that a row with

the Chinese on this issue could impact on the talks on the

1994/95 elections.

It is very difficult to predict how the Chinese will react. They will certainly be deeply suspicious and may choose to play this up as another petty trick (or

worse), or they may decide not to react in any significant

way.

7.

Hong Kong's telegram does not give us confidence that they have taken sufficient account of the possible impact on the talks, and whether there is any way in which they could postpone a decision for a few months, possibly by announcing a review of the policy. While it is Hong Kong's decision

whether to act now, we should flag up the risks involved and

ensure that they apprise ExCo of these risks.

an Wilte

NC G Whitney

goodlad.local2/CIVILSER/bp

1

agree.

chat

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Mary Kary

Cought between the devil and the deep blue sea. But the "course they propose, which we favoured when we were last consulted) is the best available, fubject to timing. I've raised an eyebrow with Govt House atat He ridiculous deadline.

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