TNAG-1951-FCO40-2779-British-capital-investment-in-Hong-Kong-1989 — Page 130

From R M Morris

IND

760 2733

21 February 1989

Miss Bannister

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+KC121

c.c. Ms Harrison

Mr Hyde

Mr Platt o/r

Mr Flesher

Apm

Mr Harrington

Mr Kavanagh

Mr Varney

Mr Ritchie

HONG KONG : TRADE AND INVESTMENT

You asked for advice and a draft PS letter to No 10 in relation to Lord Young's minute of 16 February and the fact that the Prime Minister is to meet the Governor of Hong Kong on 22 February.

2. Lord Young's minute goes around a course very familiar to the Home Secretary, and does little to respond directly to the very forthcoming proposals in the Home Secretary's letter of 25 January to Sir Geoffrey Howe. The suggestion of offering citizenship to a limited number of Hong Kong Chinese in return for "suitable investment" picks up recent, similar, suggestions in The Times. But the Prime Minister accepted, just two months ago (No 10 letter of 8 December, copied to DTI), that "it would not be practical to amend existing legislation and that we must proceed by using the discretion given to the Home Secretary".

3.

Nothing has changed since then. It is unlikely, too, that the idea will be any more attractive to the Governor, who will be concerned that the signals sent to Hong Kong should be properly balanced. This was, of course, in the Home Secretary's mind when, in his letter of 25 January, he expressed his expectation that Sir Geoffrey would want to consult the Governor about the implementation of even those more limited proposals.

4. I attach, accordingly, a short draft letter which, whilst seeking to avoid being negative, suggests that more specific evidence is needed before resort to nationality legislation be contemplated.

валосна куве hyle

RP.

RM MORRIS

IMG/89 192/757/4

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