TNAG-0838-FCO40-1047-Hong-Kong-annual-review-for-1978-1979 — Page 3

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PERSONAL AND CONFIDENTIAL

LAST PAPER

Sir Murray MacLehose GBE KCMG KCVO HONG KONG

Foreign and Commonwealth Office

London SW1A 2AH

28 February 1979

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1 MAR 1979

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HONG KONG: ANNUAL REVIEW FOR 1978

It

1. We were all grateful for your despatch of 25 January. shows the value of annual reviews, and though much of what you recorded is known to the initiated, there is a need to inform the uninitiated. I am arranging for the despatch to be printed in the General series.

2.

The list of achievements in the social field makes impressive reading. But as you know better than anyone, there is still much to be done. We are therefore grateful for your assurances, in the context of the Budget, that the measures you are taking to damp down the economy will have a minimal impact on social programmes.

3.

The immigration outlook is very worrying.

,

By the time you

get this letter you should have had authority to make your

final warning' and we must hope that the Chinese will perceive an interest in putting their own house in order. If not, I would expect Ministers to back you in a decision to impose controls on the Hong Kong side of the border, though I suspect that may be easier said than done. As for the Vietnamese refugees, I fear, like you, that the problem will get worse before it gets better. We will give what help we can - you will have seen from Hugh Cortazzi's telegrams that we on the Hong Kong side of the office have been arguing strongly that the island centre idea should be considered seriously despite the obvious difficulties, and that the Vietnamese Ambassador has been given another stiff warning. The details emerging from interrogations in Hong Kong are very helpful: I wish we could use them publicly, but we will respect the need not to prejudice any trials in the Hong Kong courts.

4. I am glad that British exports to Hong Kong have had a good year. Those concerned in the Departments of Trade and Industry have put in a lot of hard work on major projects and, with your help - for which all concerned are indebted to you have achieved some notable successes. not to neglect Hong Kong in the market is very well taken.

But your point about the need rush to get into the China The latest visitor to the FCO to hoist in the message is Horace Phillips, now working for Taylor Woodrow and likely to arrive in Hong Kong very soon.

Yours over

Donald

DF Murray

PERSONAL AND CONFIDENTIAL