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The extent of China's hypersensitivity to change, expressed both openly and privately, altered the picture. The Arculli model of minimum change then became the most pragmatic way forward and got the full backing of CRC members. The Administration also worked behind the scenes on one or two waverers to back the Arculli model. The Chinese clearly also allowed two of their votes, Tam Yiu-chung and Philip Wong, to move from "no change" to support Arculli.
The second point concerns labour importation.
It is not correct to say that, had the HKG taken the trouble to lobby UDHK before announcing the continuation of the labour importation scheme, we would have been able to count on UDHK's acquiescence, if not tacit support. Lack of consultation on this issue is little more than a convenient slogan for opponents of the scheme. There was plenty of consultation.
The political reality is that UDHK, with strong pressure from those members who are involved in organising labour like Lau Chin-shek, were in a position where opposition to the scheme, and fanning of concern about its effect, best served their interests. This certainly made our task more difficult. I agree that the issue is a potentially dangerous one, partly because in addition to some real problems it is relatively easy to stimulate unfounded anxiety. But, although there are real worries amongst the lower paid who tend to see any additional labour as a potential threat to their jobs, it would be wrong to exaggerate the extent of organised opposition. Much of it is theatrical. The pro-China union leaders have to go along with public opposition. But they, and the groups led by UDHK members like Lau Chin-shek, are by no means at one. Overall, except for a small group of activists, there is no heart for strikes. Furthermore, it is important to realise that the Hong Kong economy badly needs to import labour if it is to go on expanding. You cannot have an expanding economy and lose 60,000 people a year through emigration without feeling the pinch.
Mr Peter Ricketts
Hong Kong Department
Foreign and Commonwealth office
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Governor
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