5.

SECPET

(c) might reduce the cost in some degree but it would still be substantial: only (b) would continue the present benefit in something like the same measure.

10.

If meaningful discussion about th long term problem is not possible with the Chinese Government now, will it be possible in the mid-80s? /

Yes, because by then it will be apparent to the Chinese that discussion cannot be further postponed, and the factors for and against continuing special arrangements for Hong Kong will be clearer. Moreover by then the crucial transition to the post-Mao era should be over and a successor regime in the saddle.

11.

Chinese acceptance of the status is based on the value they derive from it.

How long is this likely to continue?

quo

If the Chinese continue to give the greatest weight to economic factors, at least up to the second half of the '80s:

b)

c)

However

.d)

even if oil exports rose substantially and the Chinese economy developed in accordance with their plan the requirements of China that must be met by imports are such that Hong Kong earnings would continue to be a valuable asset in the successor plan up to 1985.

While thereafter the importance to China of Hong Kong earnings may gradually decline though equally it may not - we can count on it continuing to be significant up to and beyond 1990.

*

We canmt rule out that by the 1980s as the mainland economy grows a Chinese Government

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