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policy behind all this.
solicited investment in
While the Chinese have China and are developing
an industrial zone across the border, they have also invested heavily in Hong Kong
out of many
examples one of the most striking was the purchase of a 50 year lease in Wanchai by China Resources for
28 million. All this is consistent with an economic policy of cashing in on Hong Kong with an eye to immediate profit either in Hong Kong or China. If there is more to it than that, the process is not sufficiently developed to be discernible. But I certainly see advantage in meeting the Chinese halfway in
this and disadvantage in discouraging a development to which they obviously attach importance.
17. Hong Kong people have been encouraged by the obvious improvement in relations at the political level. My own visit to China and the visit of the Governor of Guangdong to Hong Kong, were both 'firsts" since the revolution. They were at Chinese initiative, and were clearly aimed at maintaining confidence in capitalist Hong Kong and consequently Chinese profit from it, through demonstrating acceptance of the Colony's government.
Though Vice Premier Deng's statement to me that whatever political change might be, investors in Hong Kong could put their hearts at ease fell far short of being bankable, it was a good start to a dialogue about the future of Hong Kong which must now develop.
18. Indeed the ma in achievement of the year has been that both Chinese and British Governments have moved to discuss what has hitherto been undiscussable the future of the Colony and have done so in a friendly and constructive spirit. The process is at an early stage, but the Chinese have acknowledged the benefit to them of capitalism in Hong Kong under British management, and we have put them on notice that these benefits are threatened by a failure of confidence as the end of the Lease of the New Territories begins to affect investment policy. The Chinese appeared to feel it is still too soon and too difficult seriously to consider a solution, even an interim solution, to the future of Hong Kong. They may feel that an eventual solution might be eased by the growth of confidence in investment in China and the development of adjacent parts of now rural Guangdong into something more like Hong Kong. They have many other preoccupations, and the practical precedents involved (Taiwan and territory disputed with the USSR and Vietnam), and also the difficult points of principle and presentation
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