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and ours for water are imaginative and impressive. They hope to be ready to put proposals to our own engineers in September. I found

this very encouraging.

I have spoken about some of the ideas put to me in China and

my response, but there was in particular one Hong Kong matter in which

I wanted to make sure Hong Kong's problems were understood. This was

We are all very worried at the high figures of both

immigration.

legal and illegal immigration from China in spite of repeated representations. Naturally I stressed this issue at all levels in both Guangzhou and Peking. Their replies were entirely sympathetic to Hong Kong's predicament. They said the measures to reduce the number of legals had not been as effective as intended so more would be done. But it would take time. They strongly disapproved of the illegals,

They urged us to send back both and would step up counter measures.

illegals and over-staying legals. I pointed out the impossibility of sending back over-stayers in present circumstances. They frankly said that the disparity of the standard of living in Hong Kong and neighbouring provinces attracted people. I of course stressed that in coming in such numbers they endangered the standard of life of our own people and our economy. In the long term they thought that greater industrialisation in neighbouring through modemisation and, they hoped, increased Hong

Kong investment, would help to stabilise things. They may well be right in this, but I emphasised that it was the short term problem

They frankly admitted the difficulty of that had to be tackled now. reconciling their wish to moet Hong Kong's problem with the promulgated

policy of freer movement in China.

I have no doubt that they have a

The small number of permits issued

real problem, particularly having regard to the vast area and number

of administrative units involved. to those stating that they are coming here for permanent residence is

/no problem.