273

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Mkx oto/1

13 NOW97

FM PEKING 130740Z NOV 79

TO PRIORITY FCO

TELEGRAM NUMBER 987 OF 13 NOVEMBER 79

INFO PRIORITY HONG KONG

(256)

YOUR TELNO 900: NEW TERRITORIES LEASES

по

Jul

1. HUA'S REPLY BEARS OUT THE VIEW THAT THE CHINESE ANSWER OF 24 SEPTEMBER WAS SOMETHING MORE THAN A TEMPORISING ONE, ALSO THAT PEKING HAS TO BEAR IN MIND FOREIGN INCLUDING TAIWANESE REACTIONS

IN ANY STATEMENTS ABOUT TERRITORY. IT STILL LEAVES THE CENTRAL PUZZLE OF PEKING'S FAILURE OR UNWILLINGNESS TO UNDERSTAND THE

NEED FOR SOMETHING MORE THAN GENERALISED ASSURANCES IF CONFIDENCE

IS TO BE MAINTAINED.

3. SLIGHTLY MORE WORRYING IS THE REFERENCE BY BOTH HUA AND

HUANG HUA TO TAKING ACCOUNT OF THE ANXIETIES OF INVESTORS ''EVEN

AFTER THE PROBLEM HAS BEEN RESOLVED'', WHICH CARRIES WITH IT

HE SUGGESTION OF NO STAY OF EXECUTION.

4. THE CHINESE RESPONDED WELL TO YOUR SUGGESTION THAT WE

SHOULD KEEP IN TOUCH. I THINK WE SHOULD DO SO AND REITERATE

OUR WORRIES WHILE WE STILL HAVE PLENTY OF TIME RATHER THAN

WAIT UNTIL ECONOMIC PRESSURES ON HONG KONG BECOME MORE OBVIOUS.

WE SHOULD ALSO BEGIN OURSELVES TO THINK OF OTHER WAYS OF SOLVING

THE PROBLEM IN COOPERATION WITH THE CHINESE.

CRADOCK.

FILES

HAYAD

FED COR MR MURRAY

MR CORTAZZI

THIS IS A COPY

THE ORIGINAL HAS BEEN RETAINED

IN THE DEPARTMENT UNDER

SECTION 3 (4) OF THE PUBLIC RECORDS ACT 1958

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