TOP SECRET DOPC PAFER

The

(a) in due time there will have to be negotiations

The first of these reassertions has been made

publicly in the United Nations and elsewhere.

last three were made to me by the Chinese Prime

Minister and Minister for Foreign Affairs during

my visit to Peking in November. They confirm the

assessment made in DOP (71)83 and strengthen the

conclusions of that paper.

3. The arguments on the British interest in

retaining Hong Kong are still balanced. As an

economically developed dependency, Hong Kong's

interests can clash with those of our own industry

In the European Community and of our new partners It will cost us

Ed

But

something in political terms to maintain the

interests of Hong Kong within the Community.

Hong Kong is not a liability to our current relations

with China (though the Chinese demand for an

"official representative" in Hong Kong remains

unresolved). We still have a substantial stake in

Hong Kong's economy. Two million of the four

million Chinese in Hong Kong have British nationality,

but while Hong Kong remains a dependency there is no

immigration problem, since they have no right of

abode here.

4. The gist of the matter in 1972/73, therefore,

is that China does not want to take back Hong Kong

now or to initiate negotiations about its future,

that the population continue to want us to stay, and

that the material and moral balance of advantage to

us is to maintain the status quo.

15.

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