TNAG-1036-FCO40-1286-Future-of-Hong-Kong-1981 — Page 90

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DSR 11C

10.

ii) Probable demands for substantial immigration to

Britain;

iii) Collapse of business confidence;

iv) Losses by British firms;

v) Difficulties of administration during a transitional

period. Effect on loyalty of Civil Service and

police. Problems of law and order.

The balance is against taking the initiative to leave,

Possible Chinese Moves

11. From a range of options on a future system for Hong Kong

eventually

the Chinese would probably aim/at a form of 'special zone'

within the Chinese state but with a separate economic system

or currency. The administration might include some expatriate

element or be based on Hong Kong Chinese expertise. A trans-

ነ.

itional period would be necessary.

IMPLICATIONS FOR HMG

12.

Such a solution would cause many problems for HMG, both

in the transition period and in the long term depending on

the degree of British involvement, in the new system.

They

would arise in the following areas:

a) Citizenship and Immigration

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Dd 0532000 400 M 5/78 HMSO Bracknell

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