TNAG-1240-FCO40-1553-Future-of-Hong-Kong-1983 — Page 100

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Kowloon Walled City, an enclave that was specifically excluded from the 1898 New Territories lease (although HMG unilaterally abrogated

this clause in 1899). My minute of 12 August to Mr Donald gives an

assessment of the purpose of Xu's visit. Mr Luce may also be

interested to see a note on the Walled City prepared by Research

Department.

Reactions in Hong Kong

8.

After a period of relative optimism during the talks both

commentators and the exchanges have become rather gloomier. The

lack of a reference to 'useful' talks after the 2/3 August session

was interpreted by some as a bad sign. The Hang Seng has dropped

from 1052.84 on 1 August to 996.28 on 19 August. The HK dollar has

moved from $7.325 to the US$ on 1 August to $7.48 on 19 August.

(But there has not been much movement in the dollar in the last

five days).

Wording in Passports

9. The Home Secretary agreed to the Secretary of State's proposal HKK3d that the immigration control endorsement should be removed from

page 5 of BDTC passport and replaced, where appropriate, by an endorsement giving the right of abode in the approprite dependent territory. This good news was passed immediately to Hong Kong.

101/100) Hong Kong Telno 1141 records EXCO's gratification at the decision

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and Telnos 1161-2 record the almost universal public acclaim with

which the news was greeted in Hong Kong. In the Secretary of State's and Mr Luce's absence, Mr Whitney has written a letter of

thanks to the Home Secretary.

22 August 1983

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R D Clift

Hong Kong Department

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