-7--3

IN THIS "COMPANY" (HONG KONG). BOTH PARTIES HAVE COMMON INTERESTS:

TO MAINTAIN HONG KONG'S PROSPERITY IN ORDER TO GAIN PROFITS. BUT A

CONTRADICTION ALSO EXISTS BETWEEN THEM BOTH WANT TO HAVE A LARGER

SHARE OF THE INTERESTS AND CONTROL. HOWEVER, THIS CONTRADICTION

MOST CERTAINLY WILL NOT CAUSE THE BREAK UP OF THE PARTNERSHIP

PECAUSE THE SITUATION OF "EACH GOING HIS OWN WAY" IS SOMETHING

BOTH DO NOT WANT TO SEE. IN ADDITION, THE ABSOLUTE INTERESTS GAINED

BY BOTH HAVE ALSO INCREASED. THE ONLY PROBLEM IS THE SIZE OF THE

RELATIVE INTERESTS. EVEN THIS POINT WILL NOT BE ENOUGH TO UNDERMINE

THIS GOOD PARTNERSHIP.

LEAVING HONG KONG IN THE HANDS OF THE BRITISH ((SUBHEAD))

FROM THE POINT OF VIEW OF THE BRITISH, IF HONG KONG REMAINS

IN THEIR HANDS AFTER 1997, THAT WILL NATURALLY BE THE BEST GUARANTEE

FOR THEIR PROFITS. ONCE POLITICAL POWER CHANGES HANDS, IT IS HARD

TO PREDICT CHANGES ON THE PART OF THE PARTNER THIS POINT ALSO

WORRIES CHINA. CHINA DOES NOT YET KNOW WHETHER IT WOULD BE BEST

TO TAKE POLITICAL POWER INTO ITS OWN HANDS. IT HAS TO WORRY ABOUT

IF SO, WHETHER TAKING POLITICAL POWER WILL SCARE AWAY ITS PARTNER

THEN IT WOULD BE FAR BETTER TO LEAVE THE MANAGEMENT TO THE PARTNER.

IT CAN BE SAID THAT CHINA HAS TWO IMPORTANT QUESTIONS (ASIDE FROM

THE QUESTION OF CHANGES IN THE DOMESTIC AND INTERNATIONAL SITUATION)

TO CLARIFY AT THIS POINT BEFORE IT CAN DECIDE WHAT TO DO AFTER 1977.

THE FIRST QUESTION IS WHETHER CHINESE ADMINISTRATION OF HONG KONG

WOULD BE BENEFICIAL TO HONG KONG'S ECONOMIC PROSPERITY THE SECOND

QUESTION IS WHETHER IT IS POSSIBLE TO SIGNIFICANTLY INCREASE CHINA'S

INFLUENCE IN HONG KONG WITHOUT EXCEEDING THE LIMIT OF TOLERANCE OF

FOREIGN INVESTORS. (IF CHINA MONOPOLIZES EVERYTHING IT WILL ONLY

SQUEEZY OUT MOST OF THE INVESTORS.L HOWEVER, NO MATTER WHAT THE

ANSWERS TO THESE TWO QUESTIONS ARE, THERE IS ONLY ONE FUTURE FOR

HONG KONC'S ECONOMIC STRUCTURE--MAINTENANCE OF THE STATUS QUO.

LOOKING FROM PRESENT CONDITIONS. IT WOULD BE BETTER FOR HONG KONG

TO REMAIN IN THE HANDS OF THE BRITISH THAN TO BE TAKEN BACK BY

CHINA.

כי---

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