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RECEIVED IN REGISTRY NO. 51
Mr. Donald
27 JAN1981
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LONG-TERM FUTURE OF HONG KONG
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Many thanks for your letter of 18 December. I was grateful to you for setting out your views so fully. I will certainly let the Secretary of State see your letter but cannot do this until he is back in the Office from his holiday later in the month. I would like to take advantage of this period to ask for a little further elucidation of your views and also to give Murray MacLehose time to comment if he wishes to do so.
It would be helpful to have some elaboration of what you have in mind on the two main points, one of substance and one of timing.
2
3 In paragraph 7 of your letter you suggest that the object of the talks would be to enable us to judge what Chinese 'requirements' really are. What kind of requirements do you have in mind? The Chinese have been told through China Resources in Hong Kong of the kind of leases which Hong Kong might arrange. Do you envisage simply putting to the Chinese the same propositions on the political channel? Or are you suggesting going further in an attempt to draw them out on what political price they would demand for helping us on leases in terms of concessions on sovereignty and representation? Paragagraph 5 of your letter suggests that we should try to confine the talks to technical issues of land leases. It is not clear to me how we would achieve that objective, with which I agree at least at this stage, if we made a proposition which might invite the Chinese to go further. Perhaps therefore you would elaborate on the kind of approach you would want to make to them since this would effect both the substance and timing of any initiative which we would take.
4 My second point concerns timing. We are all agreed that, as you say in paragraph 2 of your letter, any question connected with the future of Hong Kong is an extremely difficult political problem for the Chinese both internationally and domestically. This no doubt lay behind their rejection of our proposals in June 1979, though they clearly disliked the strong legal element in them. The lack of advance soundings may have been a factor, but
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