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CRADOCK, I AM INCLINED TO THINK THAT THE SECRETARY OF STATE COULD
INITIALLY CONCENTRATE ON GETTING THE CHINESE TO EXPAND DENG'S
ASSURANCES IN A FORM THAT COULD BE PUBLICLY QUOTED. WHETHER HE
WOULD GO BEYOND THAT WOULD DEPEND ON THE CHINESE ATTITUDE.
ON A POSSIBLE POLITICAL QUID PRO QUO, I AGREE THAT THE
FORMULA DESCRIBED IN PARAGRAPH 6 OF CRADOCK'S LETTER (IE COVERING
LEASES THROUGHOUT THE TERRITORY) COULD BE A REAL GAIN. WE ARE
EXAMINING THE LEGAL IMPLICATIONS OF THIS, AND OF THE LESSER
SOLUTION OF AN ASSURANCE ONLY ON NEW TERRITORIES LEASES BALANCED
BY A STATEMENT ON SOVEREIGNTY, ALONG WITH THE IMPLICATIONS OF
OTHER POSSIBLE CHINESE DEMANDS. MEANWHILE WE WOULD BE GRATEFUL
FOR YOUR VIEWS ON HOW A STATEMENT REASSERTING CHINESE SOVEREIGNTY
WOULD NOW BE SEEN IN HONG KONG, GIVEN THAT EVERYTHING WOULD HAVE
TO BE MADE PUBLIC IN SOME WAY. WE HAVE YOUR AND CRADOCK'S JOINT
MEMORANDUM ANNEXED TO YOUR LETTER TO MCLAREN OF 21 DECEMBER 1978,
IN WHICH YOU FORESAW A POSSIBLE LOSS OF CONFIDENCE IN HONG KONG
UNLESS THERE WAS A VERY FIRM CHINESE ASSURANCE ON THE LONG-TERM
FUTURE. WOULD CRADOCK'S FORMULA BE SUFFICIENT TO ASSUAGE FEARS IN HONG KONG?
CARRINGTON
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