TNAG-0902-FCO40-1112-Implications-for-Hong-Kong-of-changes-in-British-nationality-1979 — Page 167

Ć

a number

have

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danes of unfortunate consequences.

Λ

To begin with,

it will certainly lead to unwelcome speculation about the

Territory's future at the very time when we

the very time when we are engaged in

Government delicate negotiations with the Chinese aimed precisely at removing any such doubts. This speculation could in turn

create uncertainty and undermine the business confidence that

is absolutely vital to the Territory's very existence.

A slump in Hong Kong's economy would not only

cause suffering to the people of Hong Kong (for whose well-

being the British Government is of course responsible), but would also affect British interests. Hong Kong is second only

to Japan as a market for British exports in Asia outside the

Middle East, and there are substantial British investments in

Hong Kong. We also have a contingency commitment to Hong

Kong Government pensioners that could run into thousands of

millions of pounds, and, notwithstanding the formal position

on rights of entry into the UK, we would certainly face some

very embarrassing immigration problems if the continuation of

Hong Kong in its present form were to be called into question.

There are also political dimensions to the problem.

Our relations with the Chinese could be jeopardised, since

they have if anything an even stronger interest than we

in maintaining the prosperity of Hong Kong. They would not understand our introducing apparently unnecessary changes

might

that with put that prosperity at risk. In Hong Kong itself,

what would be seen as

as a demonstration of Britain's failing

interest in the Colony could upset the delicate balance that

the Government have achieved with the Communist left there.

I realise that this scenario puts the case at its

dramatic worst, and that it is unlikely that a mere change

in title would in itself lead to the collapse of Hong Kong as

a self-sustaining free enterprise economy. But the risk that

the change could start a snow-balling process as described

above is nonetheless real. It seems to us therefore that the

Governor is right to argue that, since there is apparently no UK interest at stake, Britain should not insist on exposing

Hong Kong to this risk.

•

I should make it clear that the Governor is not

proposing that the title CUKC should be retained for all those

who now come under this heading, with the new British Citizen-

ship and British Overseas Citizenship as sub-categories for

/ certain

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