RESTRICTED

A

A

MUST BOTH MAKE A CONSTANT EFFORT TO AVOID THESE OCASSIONS : AND WHEN THEY ARISE TO END THEM, THROUGH AMICABLE CONTACT AND

DISCUSSION.

WE PAY YOU THE COMPLIMENT OF BELIEVING YOU ARE WELL ABLE

TO MANAGE YOUR OWN AFFAIRS WITHIN THE LIMITATIONS OF YOUR

CONSTITUTIONAL POSITION. THIS HAS ALWAYS BEEN THE TRADITION.

I HAVE ONLY TO LOOK AROUND ME TO SEE THAT IT HAS WORKED OUT WELL.

OUR PRINCIPAL POLITICAL CONCERN IS THAT SOCIAL PROGRESS SHOULD

MATCH YOUR ECONOMIC GROWTH. THIS, I KNOW, IS YOUR GOVERNMENT'S

OBJECTIVE AND IT ALREADY HAS MANY ACHIEVEMENTS TO ITS CREDIT IN THIS

FIELD. YOU HAVE THE RIGHT TO POINT OUT TO ME THAT IT IS ONLY

UPON STEADY GROWTH IN THE ECONOMY THAT SOCIAL PROGRESS CAN BE

FAIRLY BASED.

IN THAT SETTING I WANT TO SPEAK TO YOU ABOUT TWO OF THE

INTERNATIONAL DEVELOPMENTS WHICH I CONSIDER AMONG THE MOST IMPORTANT

AT THIS TIME, THE ENLARGEMENT OF THE EUROPEAN ECONOMIC COMMUNITY

AND THE SEATING OF CHINA IN THE UNITED NATIONS. BOTH OF THESE

ARE OF PROFOUND SIGNIFICANCE TO HONG KONG.

WE IN BRITAIN WILL BE FULL MEMBERS IN UNDER A YEAR.

IN THE NEGOTIATIONS FOR ENTRY WE KEPT IN THE CLOSEST TOUCH WITH

THE HONG KONG GOVERNMENT AND FOUGHT HARD FOR HONG KONG'S INTERESTS. I HOPE THAT OVER THE YEARS ASSOCIATION WITH THIS THE LARGEST

TRADING GROUP IN THE WORLD WILL BRING REWARDING PRIZES TO HONG

KONG . A BRITAIN IN DECLINE COULD BE NO USE TO YOU : A BRITAIN

WITH THE ASSURANCE OF EXPANDING ECONOMIC ACTIVITY WILL BE MUCH

TO YOUR ADVANTAGE. SECONDLY LIBERAL TRADING POLICIES GENERALLY SERVE OUR NATIONAL INTERESTS BEST, AND WE WILL HAVE EVERY INCENTIVE TO PURSUE THOSE POLICIES WHEN WE ARE MEMBERS OF THE COMMUNITY,

AS I SEE IT, IN THE COMMON MARKET HONG KONG'S INTERESTS AND BRITAIN'S ARE NOT OPPOSED, BUT COMPLIMENTARY.

NOW A WORD ABOUT CHINA. HONG KONG IS ACUTELY AWARE OF

WHAT GOES ON IN CHINA, HONG KOMG HAS AN ALMOST UNIQUE TALENT FOR

PLAYING A ROLE THAT OFFERS BENEFIT TO ALL AND HARM TO NONE.

THE UNITED KINGDOM WAS THE FIRST WESTERN GOVERNMENT TO RECOGNISE CHINA, AND WE HAVE FOR LONG BELEIVED THAT THE FACTS OF INTERNATIONAL LIFE REQUIRED THAT SHE SHOULD TAKE HER RIGHTFUL PLACE IN THE SECURITY COUNCIL AND THE GENERAL ASSEMBLY.

THESE DEVELOPMENTS ARE NOT RELATED IN ANY WAY TO THE

STATUS OR FUTURE OF HONG KONG. ON THE CONTRARY YOU HAVE EVERY

-2-

RISTRICTED

/REASON

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