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5. At the same time, it may be that such a project, situated on the Chinese side of the border, would have less significance than would a major joint venture situated in the New Territories themselves. To that extent, Sir Lawrence's view of the import- ance of the Guangdong project may be exaggerated. I doubt if it will provide in itself a solution to the question of the future of Hong Kong, as he seems to imply. That does not mean to say, however, that we should play down such importance as it does have. It follows that in our briefing for Ministers we should draw attention to the general validity of Sir Lawrence's ideas on the advantages of Guangdong/Hong Kong development, without accepting all his specific ideas on the question. It is doubtful if the Chinese themselves have thought the matter through on these lines.
6.
I am slightly puzzled by Sir Lawrence's question 8 in enclosure 3. I can find no reference in the Notes on the Manage- ment Committee Meeting of 30 June to a Chinese description of Hong Kong as British territory. This would be unusual, as the Chinese are careful to refer to Hong Kong as Chinese territory under British administration.
7. I have also had an opportunity to see a copy of Stones' paper to the Management Committee Meeting of 9/10 July, and have read the papers sent with your letter in conjunction with this and with BTC Hong Kong telegram No.92 of 14 July. Clearly the implications of the Chinese interest in British Government support will need a good deal further examination. I should be interested to see the reactions of other interested Departments to the proposals on insurance, accident liability and foreign loan credit guarantees.
CC:
P Morrice
Hong Kong and General Department
G Stevens Esq, Dept. of Energy
Mr Alston, JNU, FCO
FED, FCO
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