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3. With Mr Callaghan's projected visit to Hong Kong in mind, consideration had been given at the official/to a strategy for Hong Kong covering its long-term future, its internal policies. in the medium term, and the need to promote a more active inform- ation policy to combat anti-British sentiment in the higher echelons of local society. The Governor was in agreement with our con- clusion that we will need to approach the Chinese about the future well before 1997 (when the New Territories' lease runs out), probably in the mid 1980's. He also agreed that nothing should meanwhile be done which would prejudice our negotiating position, eg by agreeing to our appointment of an official Chinese represen- tative in Hong Kong (see China brief no 10). Proposals for a more active information policy involving close co-operation with the Hong Kong Information Services are also substantially agreed; and the Governor has given the lead in implementing them.
4.
However, certain issues relating to the promotion of internal policies to produce a wider measure of social justice combined with fiscal and institutional reform still remain to be clarified. These covered such matters as the enlargement of Executive and Legislative Councils and widening the social base of representation, (the present Council being exclusively drawn from the professional classes and big business); the raising of tax levels to provide for greater spending; the provision of social security benefits; and the improvement of labour conditions. The Governor, whose commitment to social reform is well recognised, has promised further comments on the practicability of some of the reform measures we considered desirable over the next few years. He plans to return home towards the end of June or early July for discussions, during which it is hoped he might call on the Secretary of State. By then it should have been possible to isolate the points requiring decision.
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CONFIDENTIAL