о
0
6.
DSR 11C
SECRET
-3-
Chinese Government;
b) the continuing defence commitment;
c) damage to our prestige if we are required to
administer Hong Kong in humiliating circumstances,
or are required to leave in an undignified fashion;
d) possible point of conflict in any future USSR/China
war;
e) safe haven for refugees from South-East Asia;
f) obligation to protect Hong Kong citizens abroad;
g) compensation for members of HMOCS if they suffer
loss of employment.
Hong Kong as a Benefit to China
a) valuable source of foreign exchange;
b) important trading partner in its own right;
c) window on the free world;
d) possible bargaining counter;
e) helps attract investment in, and trade with, China.
7.
Hong Kong as a Liability to China
a) Propaganda target for the Russians;
b) possible base for interests hostile to China;
c) highlights the economic failure of the Chinese system;
d) undermines national pride.
The options
8. Independence ruled out. International city state
controlled by treaty a possibility, but unlikely.]
9.
Paragraphs 4 and 5 would, on balance, appear to point
to a dignified, negotiated withdrawal by UK but only
possible with Chinese acquiescence.
1997 obvious year for
this. But Chinese interests would not appear to favour this.
Any unilateral move to quit would bring financial disaster
SECRET
/to
89280 Dd 532113 200M 2/79 StS