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UK belongers with legal claim to entry cannot be determined

but it is thought to be comparatively small. However,

there are currently some 21 million British subjects of

Chinese origin in the Colony, of whome some 200,000 300,00

may have special claims on us through their connection with

the colonial Government. The domestic political strains

caused by the recent exodus of UK passport holders from

Uganda indicates how serious this problem could be for

us; and the exodus from Vietnam suggests that the scale

could be much greater than might be expected. There is

furthermore a risk that one of the world's leading

financial centres might collapse if the political pressures

become too great; and a contingent aid liability of

substantial proportions if, as we could expect, loss of

confidence in the Colony were to lead to industrial

to decline and unemployment.

It is impossible/forecast at

what stage such problems could occur; but once confidence

began to erode a debacle could quickly occur. As the

history of Macao shows, there is no guarantee that China

would be prepared to resume possession however desirable

this might be to the colonial power and we could not

look to Peking for help in overcoming our problems.

These problems may be manageable when the time is ripe to

discuss the whole issue with China and provided China can

be persuaded of the need for a jointly agreed policy about

what is to be done for the future. Any premature more,

Page 21wever, might we bagetrous and one foagic 263

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would be held responsible.

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