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Hong Kong hostile to any suggestion of repetition of these
cutbacks.
Governor and senior Hong Kong officials have discussed
Discussions with partners on EC
with UK Ministers and officials.
mandate are now in progress. HMG consider that Hong Kong's
position as a market without quota or customs restrictions should
be taken into account.
9.
(NOT FOR DISCLOSURE)
Ministers have endorsed DOT view
that, while trying to keep Hong Kong down to very low or even nil
growth rates on present quotas, UK should resist pressure within
EC to impose further cutbacks on the Territory. Present indications
are that this would in the last resort be acceptable to Hong Kong.
FUTURE OF HONG KONG
10. Evidence is that Chinese have not yet made up their minds
on long-term future of Hong Kong. For the present, the status quo
suits them well: Hong Kong is a valuable source of foreign
Chinese leaders have
exchange and of expertise and technology.
stated that there would in any event be no early change in Hong
Kong's capitalist system, Vice-Chairman Deng Xiaoping has given
specific assurance, lately renewed to Lord Carrington in Peking,
that investors in Hong Kong should ''put their hearts at ease''
Lord Kadoorie is particularly interested in the development of
crossborder' economic cooperatives (eg the Guangdong Nuclear
Project) in order to boost confidence in Hong Kong.
•
Hong Kong and General Department
16 October 1981
CONFIDENTIAL