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matters alone for the time being but makes no positive suggestion as to a way out of the present dilemma while recognising that a way out has to be found in the 1980s. There can be no certainty that the internal situation in China then will be as satisfactory as it is now;
and a solution now, reconciling ideological and pragmatic considerations, is some form of insurance policy for the future e.g. by strengthening the hands of the pragmatists in Peking.
7.
Furthermore, the outline paper does not present the Secretary of State with anything very positive to say in his discussions with the Chinese next May when Hong Kong is one of the principal common interests we share with the Chinese. I remain convinced that to appeal, as the Secretary of State has suggested, for the cooperation of e.g. the Communist trade unions, in effect, in the Government of Hong Kong presents very serious risks. The line suggested, with the acceptance of official Chinese representation in Hong Kong, seems in contrast a more promising course. I note that when the question of Chinese representation was discussed in the course of Sir Alec Douglas-Home's visit to Peking in 1972, the Chinese suggested that the appointment of an official Chinese representative could be arranged in a way to avoid destabilising effects if his terms of reference were carefully drafted: this seems to indicate that there may be a good deal of truth in Mr Donald's analysis of Chinese attitudes.
8.
One difficulty remains the Governor's present opposition to the idea of a Chinese representative on the grounds that it would inevitably erode his authority. This would certainly be the case if the appointment were made in isolation and in response to Chinese pressure but it may not necessarily be so if set in the broader context. Furthermore it would not offer any significant hostage to fortune for the future. As long as the Chinese continue to see the stability and prosperity of Hong Kong as in their interests, he can be expected to stick to his brief. If on the other hand the Chinese abandoned this view of Hong Kong's value to them, they could make life in the Colony intolerable whether they had an official representative or not. However, I would be hesitant about putting the idea to the
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