TNAG-2021-FCO40-2883-Relations-between-Hong-Kong-and-Hungary-1990 — Page 38

CONFIDENTIAL

D21737

MDHOAN 7362

4. ASSUMING THAT THE SECURITY OBJECTIONS CAN BE CLEARED UP, SEEN FROM HERE, THERE WOULD APPEAR TO BE A CASE FOR GOING AT LEAST SOME WAY TO MEET THE HUNGARIAN REQUEST:

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(I) IN THE LIGHT OF POLITICAL CHANGES IN EASTERN EUROPE, THE ARGUMENTS FOR MAINTAINING A RESTRICTIVE POLICY ARE FAST BEING UNDERMINED. IT IS NO LONGER APPROPRIATE TO CONTINUE TO CATEGORISE HUNGARY AS A QUOTE SOVBLOC STATE UNQUOTE AND TO TREAT IT IN THE SAME WAY AS CUBA OR NORTH KOREA. FOLLOWING THE SECOND ROUND OF THE HUNGARIAN ELECTIONS ON 8 APRIL, HUNGARY IS NOW IN THE PROCESS OF FORMING A COALITION GOVERNMENT OF CENTRE/RIGHT PARTIES. THE REMAINS OF THE OLD COMMUNIST PARTY FAILED TO WIN A SINGLE PARLIAMENTARY SEAT. IT IS NOW A SPENT POLITICAL FORCE. THE HUNGARIAN SOCIALIST PARTY, WHICH WAS FORMED LAST YEAR BY THE REFORM COMMUNISTS GOT ONLY 10 PER CENT OF THE VOTE. SOVIET TROOPS ARE ALREADY WITHDRAWING FROM HUNGARY AND WILL HAVE LEFT COMPLETELY BY MID-1991. HUNGARY IS SEEKING INTEGRATION INTO WESTERN ORGANISATIONS SUCH AS THE COUNCIL OF EUROPE AND EVENTUALLY THE EC.

(II) THE ESTABLISHMENT OF A CONSULATE/TRADE OFFICE IN HONG KONG IS EVIDENTLY A MATTER TO WHICH THE HUNGARIANS ATTACH IMPORTANCE AS PART OF THEIR STRATEGY FOR DEVELOPING NEW ECONOMIC AND COMMERCIAL LINKS IN THE ASIA/PACIFIC AREA. THEIR PLANS TO SEND A HIGH POWERED DELEGATION OF BUSINESSMEN AND ECONOMIC POLICY MAKERS TO HONG KONG IN MAY ARE A MEASURE OF THE PRIORITY THEY ATTACH TO THE TERRITORY. AT A TIME WHEN WE ARE DOING EVERYTHING POSSIBLE. TO IMPROVE OUR BILATERAL RELATIONS WITH HUNGARY AND TO FOSTER CLOSER TRADE AND ECONOMIC LINKS WITH BRITAIN, IT IS BECOMING INCREASINGLY DIFFICULT TO EXPLAIN WHY WE ARE BLOCKING THEIR EFFORTS TO ESTABLISH ANY KIND OF PERMANENT PRESENCE IN HONG KONG.

(III) AS FAR AS STRENGTHENING HONG KONG'S SEPARATE STATUS IS CONCERNED, WE WOULD HAVE THOUGHT THAT THERE IS MUCH TO BE SAID FOR ESTABLISHING THE MOST COMPREHENSIVE FOREIGN REPRESENTATION POSSIBLE BEFORE 1997.

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(IV) ALTHOUGH HONG KONG'S TRADE WITH HUNGARY CAND THE REST OF EASTERN EUROPE) ONLY REPRESENTS A MINISCULE PROPORTION OF THE TERRITORY'S TOTAL TRADE AT PRESENT, THIS IS HARDLY SURPRISING IN VIEW OF THE EXTREMELY RESTRICTIVE VISA REGIME WHICH WAS APPLIED TO EASTERN EUROPEAN BUSINESSES UNTIL RECENTLY AND THE ABSENCE OF ANY PERMANENT TRADE REPRESENTATIVES. GIVEN THE MOUNTING PRESSURE FROM HONG KONG BUSINESSES TO LIBERALISE YOUR VISA PROCEDURES FOR EAST EUROPEANS AS WELL AS THE RAPIDLY EXPANDING TRADE LINKS BETWEEN THE EMERGING EAST EUROPEAN DEMOCRACIES AND HONG KONG'S

THIS IS A COPY

THE ORIGINAL HAS BEEN RETAINED

IN THE DEPARTMENT UNDER

SECTION 3 (4) OF THE

PUBLIC RECORDS ACT 1958

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