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confidence in Hong Kong and do serious damage to the economy.
4. M Ambassador, Peking, supports the Governor's view: he believes
that the Chinese might be upset by our taking action that threatened
the continuing prosperity of Hong Kong (to which they attach consider-
able importance because of the role they see the territory playing in
their modernisation programme). The Ambassador fears that if we
change the status of Hong Kong CUKCS at this juncture, it might
lessen the chances of a successful outcome to our negotiations with
the Chinese over the New Territories leases.
5. A copy of a draft memorandum we are proposing should be sent to
the Home Office setting out the Hong Kong case in detail is attached.
6. We shall continue to press Hong Kong's case, though we do not
know whether the Home Secretary can be persuaded to accept it.
Mr Whitelaw has told his officials that he is opposed to the retention
of the title CUKC by any category of British citizens. The Governor
briefed Lord Carrington on Hong Kong's problem when he visited Hong
Kong in June, and we may need to refer the case to him if we cannot
convince the Home Office at official level.
Hong Kong and General Department
September 1979
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