TNAG-1037-FCO40-1287-Future-of-Hong-Kong-1981 — Page 35

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CONFIDENTIAL

SPEAKING NOTES

NATIONALITY BILL

1.

Like most dependencies, Hong Kong would prefer that there

should be no change in citizenship status. There has been extensive

consultation with them since the publication of the Green Paper in

1977 which was followed by this administration's White Paper and the

publication of the Draft Bill in January.

2.

HMG have explained to Hong Kong that the Bill is not aimed at them and represents no distancing of the UK from its dependencies.

Our commitment to Hong Kong remains.

3.

Representations by Hong Kong on a number of issues, mainly concerning the acquisition of British Citizenship through naturalisation by CBDTS, are being carefully considered by Ministers.

FUTURE OF HONG KONG

4.

Given the excellent state of Anglo/Chinese relations the problem of 1997 is not a threatening one. The Chinese leaders have made clear their interest in Hong Kong's continuing stability. Chinese reliance on Hong Kong for 30-40% of foreign exchange. Deng Xiaoping's message to investors in 1979 'to put their hearts

at ease'.

5.

Our best approach is to build on this common interest with the Chinese to maintain confidence in the Territory, both internally and by foreign investors. Practical measures of this sort are likely to be mainly economic and should ensure a good basis on which the legal problems can eventually be tackled.

6.

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Meanwhile, confidence in Hong Kong remains high.

Haddon-Cave's

1981 Budget was particularly optimistic.

CONFIDENTIAL