CONFIDENTIAL
HKK 020
RECEIVED IN REGISTRY MO. 31
JUN 1978
THE SECRETARY OF STATE'S MEETING WITH THE AUSTRALIAN FOREIGN SECRETARY, 13 JUNE 1978
CHINA AND HONG KONG
DESK OFFICER
INDEX
PA
No
б
REGISTRY Action ken
66
Line to Take
1.
Relations between HMG and the Chinese People's Government (CPG) are at present good and there are regular exchanges at all levels. There is every reason to anticipate that this state of affairs will continue as we develop closer economic and political links with China, China's declared intention to modernize her economy offers considerable scope for trade and the UK hopes to play a major part in supplying the technology and equipment which China will need.
These good relations are reflected at a practical level in relations between Hong Kong and the Chinese provincial authorities in Canton. In recent months there have been several examples of co-operation over such things as unscheduled air services and water supplies. We also hope that the Chinese will again prove co-operative in controlling the rate of immigration into Hong Kong from China: this is currently causing concern.
2.
3. The major unresolved question is the future of Hong Kong after the New Territories' lease expires in 1997. Chinese officials have repeatedly said that the status of Hong Kong is not an immediate problem but one to be settled by negotiations when the time is ripe. In addition a number of prominent Chinese officials have recently made speeches that were clearly intended to maintain business confidence. The Chinese authorities will probably be unwilling to commit themselves publicly to any more specific undertaking about
But we the future of Hong Kong, at least for the time being. believe that the very substantial economic benefits which China derives from Hong Kong (over one-third of China's foreign exchange earnings come from the Colony) should be sufficient inducement to them to come to some kind of informal understanding within the next 5 years. As yet our thinking is only at the most preliminary stage and we have no clear picture of what form such an understanding
might take.
Hong Kong & General Department
Hong Kong,
June 1978
CONFIDENTIAL