TNAG-1896-FCO40-2690-Calls-on-Francis-Maude--Minister-of-State-for-Foreign-and-Co-1989 — Page 40

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necessary to support the other bodies who were pressing for greater importation of labour. This was now becoming a constraining factor.

He said that if it was decided to keep the 50,000 or so Vientamese boat people and to start turning away all newcomers, this could work

for Hong Kong. Mr Maude said this was a very difficult problem. He

noted that there seemed to be a natural antithesis between the

Chinese and the Vietnamese. But he noted that the Vietnamese

refugees had been going out to work and that this had been working

satisfactorily.

6. Turning to the Chinese political situation, Dr Sohmen said that

the Chinese side seemed to be seizing on any pretexts to cover their

domestic failings. Hong Kong was an easy target. Sir Y K Pao's

meeting with Deng Xiao Ping had been reported widely in the Chinese

press. This was unusual: private meetings were usually kept

private.

7. Mr Maude agreed that the next few months would be difficult.

However there was important business on the Basic Law which had to be done. It was vital to get the Basic Law right, particularly to

maintain business confidence. However, with the lack of clear

Chinese leadership at present it was difficult to get them to move

decisively on any subjects. Dr Sohmen agreed but he felt that the

situation was similar to that in 1982/84 when the Chinese did

eventually move on a number of areas. He said that fundamentally he

did not see any one solution to the confidence problem. People

would still leave, no matter what we did. Mr Maude agreed, he said

that time was really the only solution.

8. On international investment in Hong Kong, Mr Maude asked whether

the Governor's address to LegCo had been helpful. Dr Sohmen said the reaction had been positive, particularly outside Hong Kong. There were lots of groups and consortia who wanted to get involved

in the contracts. The general view was that even if there were

going to be changes post 1997, these would not be immediate so there was still time for projects like the airport to be financially

viable.

9.

On constitutional development, Mr Maude asked whether Dr Sohmen