CONFIDENTIAL
inadequate and as such it was badly coordinated.
Mr Jordan,
the Secretary of Trade and Industry, scoffed at the idea that the Government could do anything effective over diversification
and said that the only useful step which the Government could take was to bring down the price of industrial land.
TRADE
10. It seemed clear that Hong Kong's exports are still doing well and their fears over the Textile Agreement have not been well founded. I urged strongly that they should not overplay their hand in future. There was a danger that they would cry wolf once too often when the real crunch did come.
FORCE LEVELS
11. There is some concern in Hong Kong that the current Force Levels are the bare minimum. They might indeed have to be increased at some stage although the Hong Kong Government do not intend to press this at present. This matter was discussed at some length with the Chief of Defence Staff.
RELATIONS WITH CHINA
12. The main Government concern was over an increase in legal immigration (over 100 per day). It was interesting that at the UMELCO meeting Sir Y K Kan asked whether I expected to be discussing Hong Kong's relations with China while in Peking. When I said that I certainly did not intend to do so, there was quite a considerable discussion about the need for an approach at an appropriate time.
11 May 1978
cc: PS/Lord Goronwy-
Roberts
PS/PUS Mr Murray
HAH Cortazzi
(typed in Mr Cortazzi's absence)
CONFIDENT IAL
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