SECRET
HKCD
110)
HKB 026/2
Foreign and Commonwealth Office
London SW1A 2AH
Dan Charles
Hong Kong
7 June 1989
Mizo Marsden
enter
W 12/6
Thank you for your letter earlier today, about the meeting the Prime Minister will hold at 1730 tomorrow with the Governor of Hong Kong.
In addition to democratisation and nationality matters, the meeting will be an opportunity to hear from the Governor about the present mood in Hong Kong following developments in China. The Prime Minister may wish to ask about the impact of the general strike held in Hong Kong today. There has also been some disturbance of public order (the Police had to use tear smoke against some demonstrators in Kowloon), although the authorities now have the situation well under control.
The Prime Minister may also wish to ask the Governor how he views Hong Kong's economic prospects in the light of recent events. The Hang Seng index has dropped 1043 points from 3267 points on 18 May. It dropped 582 points on 5 June alone, but by 7 June had recovered 139 points.
The Governor will also wish to describe the present Vietnamese boat people crisis in Hong Kong which OD will be considering earlier that day. The Governor hopes that it will be possible to announce after the meeting some specific assistance by HMG to help Hong Kong cope with the problem. This would be a good opportunity to publicise the recent decision to make £4.25 million available for emergency accommodation for new arrivals.
The highly charged situation in Hong Kong will need to be taken into account in considering the nature and timing of any announcement of any new moves in democratisation and nationality. The Foreign Secretary will have some proposals to make on both matters at the meeting.
SEGRET
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