CODE 18 - 17

SECRET

Reference..

67A

Mr Quantrill HKGD

CALL BY GOVERNOR OF HONG KONG

1.

HKK 040/1

RECEIVED IN REGISTAY MU. 51 14 AUG 1978

DESK OFICER INDEX

No/d

PA

t...

REC

Action Taken

We

Sir Murray Maclehose called yesterday afternoon. discussed the lease and the longer term prospects for Hong Kong. I agreed with him that this was a good time to look at the whole question, as Sino-British relations and Hong Kong's relations with China were in unprecedently good shape. I said I understood his latest proposals were to be considered in the context of a fuller study of relations with China, and could therefore only comment informally on the proposals he had sent for handling the problem of the lease. I said it seemed to me that whatever device was adopted it would have to enable the Chinese to acquiesce as quietly as possible; though it had to be expected that they would be bound to be asked at some stage whether they formally agreed with any measures being taken by the Hong Kong Government/HMG.

2.

We also talked about the problem of official Chinese representation in Hong Kong. Sir Murray confirmed that not a word had been said on the subject by the Chinese since Chiao Kuan-hua mentioned the matter, almost in passing, to Mr Crosland in May 1976. He agreed that we might take further reassurance* from the fact that the last Chinese official to bring the subject up had himself subsequently been purged. Sir Murray said he did not completely rule out the possibility of accepting an official representative, but it would have to be part of an understanding designed to enhance the longer term stability of Hong Kong, and not to weaken it. If the proposals were presented in the right way it could at some point have a reassuring effect.

3.

If

Sir Murray said he would still like to discuss the legal implications of the proposals he had sent to Mr MacLaren. possible he would like to set up a meeting with the appropriate Legal Adviser, perhaps with Mr Cortazzi as chairman, and representatives from HKGD and FED: he suggested 16 or 17 August. I said I would pass this suggestion on. I do not know how it fits in with the next step as discussed at Lord Goronwy-Roberts' meeting yesterday morning, but perhaps you could take this from here. I will be in the office at that time and would be glad to attend if the meeting materialises.

20 July 1978

SECRET

Auchind Sammel

RC Samuel

Far Eastern Dept

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