CONFIDENTIAL
5. The Hong Kong Government rave not formally specified any figure for the proposed increase in HMG's contribution. But Mr K Y Yeung, the Secretary for Education and Manpower has confirmed that an increase in line with inflation would be well received in Hong Kong
as a sign of HMG's continued commitment to the Scheme.
6. In 1987 Ministers reviewed the fee support schemes for Malaysia, Cyprus and Hong Kong and decided that they should be phased out, because they had achieved their objective of reversing the downward trend in the number of students coming to the UK and would be better replaced by the selective and targetted FCO
Scholarships Scheme. (The fee support schemes are of course non-selective). But it was eventually agreed on political grounds that the Hong Kong scheme should be maintained at its existing level of £2 million per annum. Hong Kong is currently the largest recipient of the FCO Diplomatic Wing's Scholarship resources.
7.
A continuing flow of Hong Kong students coming to the UK for university education is one of the best means of building up long-term links with the territory stretching beyond 1997. There is also a long term economic and commercial advantage to Britain,
particularly at a time when an increasing number of students are going to the United States for their training.
8.
There would be significant presentational and political benefits if we could meet Hong Kong's request. It would provide Mr Maude with something positive to announce during his forthcoming visit to
Hong Kong in April; it would be seen as
as a worthwhile gesture of
support, which would be widely welcomed in the territory,
particularly at a time when the expansion of tertiary education is regarded as a top priority by the Hong Kong Government; and it would also help us to deflect criticism that our nationality package is only aimed at helping the wealthy elite.
9. The problem is money. There is no budget subhead from which
£100,000 can be found in FY 1990/91. The FCO Scholarships and Awards Scheme, from which the Joint Funding Scheme is presently
funded, is already fully committed for Selective Schemes 1990/91. Selection procedures are well advanced and awards have already been
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