CONFIDENTIAL
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industrial plant, or a venture needing cheap labour might be better off in the Delta. An electronics plant would be better
suited to Shenzhen. Also, Shenzhen's profits tax was half the
rate elsewhere (15% compared with 30%).
14.
Li Hao said that there should be co-operation between Hong Kong and Shenzhen not only on a company to company basis
but also between groups of interests. He referred to the
recent formation of an "electronics promotion association"
(sic). The Governor agreed.
15.
The Governor repeated his invitation to a Shenzhen group to come to Hong Kong for a briefing on PADS, which Li Hao did not appear to have understood. He also invited Li Hao
himself to visit Hong Kong at some stage. Li Hao noted both
but failed to respond specifically to either.
16.
The Governor noted that illegal immigration increased by nearly 30% in 1987. It was higher still in January 1988.
Li Hao said that very few came by land. Most came by sea
(sic). Many were criminals escaping to Hong Kong.
Post-meeting Note
17.
Deputy Political Adviser spoke to Li Ruohe (NCNA) immediately after the meeting and repeated the Governor's points in paragraphs 15 and 16 above. Li said that he was sure
that Li Hao would welcome a visit to Hong Kong. He also saw
the merit of a briefing on PADS. Peirce said that the great
majority of illegal immigrants came by land. Li said that the
Mayor was not briefed on the subject. Border control was a
provincial, not an SEZ responsibility. (Comment: but Li Hao
is also a Vice-Governor of Guangdong!)
CONFIDENTIAL
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