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reinstated entrepot role following China's open door policy and of most foreign investment to China coming from Chinese businessmen in Hong Kong. Most of the latter investment was economic but part of it was political, the benefactors looking to the long-term, eg Sir Y K Pao's activity like financing the university in his native city. This political investment could well have increased since the Joint Declaration. Also Chinese investment had grown in Hong Kong. The Bank of China was prepared to involve itself in Hong Kong banks getting into trouble. Mr Yanai wondered if Japanese investment, second after the US, could help towards future prosperity? Dr Wilson agreed; indeed damage to the agreement on GATT could well seriously affect Japanese investment. Mr Yanai observed that Korean businessmen were trying to develop de facto relationships with China, much though Hong Kong and Korean exports to China were increasing beyond what the statistics show.
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3. Dr Wilson raised the question of Vietnamese refugees. Was there any news of the further resettlement mission? Mr Yanai replied that the immigration authorities in Tokyo were strict in their screening and the MFA were trying to persuade them to fill the enlarged quota. would use Dr Wilson's reference to this as a lever on his return. Dr Wilson appreciated this: Hong Kong, with little territory, took Vietnamese while sending back to China illegal immigrants who had relatives in Hong Kong. We saw advantage in UK participation in the informal 'Honolulu' group discussions and were in the process of approaching the Japanese Government about this.
Compassion fatigue' was a problem.
4. Dr Wilson expressed his thanks for the arrangements made for the Legislative Council delegation to look at nuclear power. The Japanese Consul-General had been remarkably quick off the mark with invitations. Mr Yanai said that the Consul-General was his classmate and he would pass on Dr Wilson's remarks.
Vietnam
5. Dr Wilson asked if the Japanese had views about the leadership and economic reform. Mr Yanai thought that possible candidates for the succession were themselves quite old and leadership change would occur slowly rather than drastically. The Japanese had no good information on who would emerge, their Embassy's contacts being limited. The war was the main source of difficulty in the economy and it had to be remembered that most Vietnamese had never known peacetime. While Vietnam was
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