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ie that significant numbers of key employees of British firms are leaving for employers better able to guarantee them a passport. They will want to take account of your advice on this point and would be grateful for your fullest comments and the widest possible soundings which you can take. (They have no cases on record so far, other than Bonas, that would give substance to the suggestion that this is happening).

5.

According to Jardines' figures (routinely used by DTI as definitive), British owned or controlled firms comprise over 40% of the HK private sector. But we do not think the scheme should be modified to operate on a crude quota basis. After all, British undertakings' employees account for only 19% of applicants under the General Occupational Class. And we consider that their disproportionate success rate (60% as compared to 53% for the private sector as a whole) is a measure of the effectiveness of the British links points, and sufficient justification for retaining them at their present level. But we should be grateful for your views, and we do not rule out changes should they look to be necessary.

6. I would like to reply to No10 by the end of next week, but will that give you long enough to take soundings? With apologies for the imposition, grateful for your initial views by 18 January if possible.

Yours ever Гов

John Morris

Hong Kong Department

cc Mr David Love OT2, DTI

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