CONFIDENTIAL
more marked during 1990. This is exacerbated by
continuing high emigration (60,000 last year) with
significant numbers in the professional/managerial
sector. If raised, the Prime Minister could say:
Know inflation is a problem but believe that Hong
Kong Government is tackling it successfully. Will need
to remain vigilant.
Importation of Labour
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The current shortage of labour is impairing growth.
Importation of labour provides a remedy but a controversial one. The Hong Kong Government envisage
allowing in up to 20,000 people for the airport project.
If raised the Prime Minister could say:
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Importation of labour can be necessary and useful
already over 60,000 domestic helpers in Hong Kong.
Know that Hong Kong Government are very aware of the need to balance needs of employers with aspirations of
wage earners.
Defence Issues
The Hong Kong Garrison consists of four battalions
(three Gurkhas and one British), air and naval support.
We have announced that one battalion will be withdrawn by
September 1992: the police have been taking on former
military functions, eg border patrols. A second battalion is likely to be withdrawn around 1995, with two
remaining until late 1996/early 1997. Recent decisions
CONFIDENTIAL
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