Secretary of State

HƯNG KONG

SECRET

RECEIVED IN REGISTRY No.52

25 JUN1974

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1. I have had good and wide-ranging talks with the Governor of Hong Kong on 18 and 20 June. I am satisfied that we are broadly on the right lines and that, in the Governor we have a man who is doing an outstanding job in coping with a difficult task. There are many problems of politics, of social development and of economics. Hong Kong is an anomaly. It is a semi-autonomous city state which, anywhere else, would be independent. But China will not accept any move towards independence. The Chinese are content to accept our administration and will make no attempt to take over Hong Kong, at least while Mao and Chou are alive. But they are bound, for formal reasons, to continue to claim that Hong Kong is an integral part of China. The Governor has to work within this frame. He also has to cope with severe over-crowding and social problems arising from the Colony's history. His ten-year social programme, which includes new government housing for almost half the population, is on the right lines.

2. You will be seeing Sir Murray MacLehuse on 24 June. In the time available I suggest that you might concentrate with him primarily on three questions of current importance. These are possible constitutional changes (on which there is some pressure in the P.L.P.); the Chinese proposal for an official Representative in Hong Kong; and the question of the death penalty.

3. On constitutional developments, the way to Representative Government is blocked by the Chinese, who would certainly regard it as a move towards independence. In this situation the Governor believes that the best way to enlist the active cooperation and assent of the Chinese population is to appoint some local unofficial Chinese to executive positions within his Government as, in effect,

/appointed

SECRET

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