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copied to Uki 040/1

CALL BY THE GOVERNOR OF HONG KONG ON THE SECRETARY OF STATE: 23 JUNE 1981

Present:

The Rt Hon The Lord Carrington

Sir Murray MacLehose GBE KCMG

KCMG MC

KCVO

Mr Nicholas Ridley MP

Mr A E Donald CMG

Mr R D Clift

Mr R M J Lyne

THE FUTURE OF HONG KONG

1. Sir M MacLehose said that he was not pessimistic following the Secretary of State's visit to China. Relations with China remained good and were progressing. The problem was simply that it was too early to push Peking. Lord Carrington asked whether 1982 was critical. Sir M MacLehose said he did not see this as a magic date, but if there were a slide of confidence we would have to be ready to act quickly. Equally, we would need to be prepared in case the Chinese after all showed themselves ready to discuss the question.

Mr Donald said that a paper was being prepared against both these contingencies. Lord Carrington commented that we would have to think of proposals different from those which were put forward in 1979.

2.

3.

On the proposed visit by the Prime Minister to the Far East, Sir M MacLehose said that if this took place in 1982 there would be renewed speculation about a settlement of the Hong Kong question. It could well be however that the Chinese would not be ready to tackle the problem by then. He was not pressing for any postponement but it was important that the Prime Minister should be prepared for a possible disappointment on this question. It could not be forced through the Chinese. Lord Carrington agreed.

4.

Lord Carrington asked about the present situation in China. Sir M MacLehose said that he thought the continuing instability was worrying. He had had a useful conversation with Mr Haig before the latter's visit to China. He thought that Mr Haig had the right ideas on Taiwan and that what he had said about arms supplies would be helpful. Lord Carrington agreed but pointed out that President Reagan still felt an obligation to provide some form of support to Taiwan.

DISTRIBUTION:

HKGD (to enter

Private Secretary

PS/Mr Ridley

PS/PUS

Sir E Youde (o/r)

Mr Donald

Mr McLaren, FED

Acting Governor, Hong Kong(Personal)

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