SECRET - UK EYES 'A'

2185864

Jang Saverbults

GE Clark Esq Cabinet Office 70 Whitehall LONDON

Fiss

1973 Survey sent

W Raupsam

HKK O40/2

RECEIVER

25 JAN 1978

9 SK OPHOLS

INDEX

PA

Panuary 1978

0.51

we spche. You will

Muteriul

Dorothing Rope (108). The gathering

бунк

on the economic structuy

218 5877 Metropola Bldg. Пеггорова

THE THREAT TO HONG KONG

1.

jales

NIR.

Thank you for your letter J012 of 22 December telling me of the meeting at 11.00 s.m. on 6 January for preliminary discussions on a revision of the 1973 paper on this subject. I shall be happy to attend and in general I agree with your proposals on format and on the points which need particular thought.

2. On point 3 I would like some thought to be given to the effect of a Chinese decision to try and run Hong Kong in its present form as a manufacturing and trading centre.

3. I agree completely with your point 5 on the need to include a further possible threat and would add to your illustration of the recent police disturbances a possible KMT attempt to gain control and civil disorder provoked by radicals outside the control of Peking. Both are unlikely but so was a police mutiny.

4.

I have some reservations on the added importance of the 1997 date. Certainly this must be given more thought as the date draws nearer but I would suggest that it becomes of prime significance when it approximates to the date of amortaization of investment in the private sector. This is currently of the order of 8-10 years, However, second generation considerations do play a part in investment decisions.

5. Finally, could I ask that the views of Hong Kong and Peking be sought as early as possible in the drafting process?

SECRET - UK EYES A

JAB Stewart

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