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the status of Taiwan negotiated in 1972 in connection with the

establishment of full diplomatic relations. An acknowledgement'

(i.e. taking note) of the Chinese position that Hong Kong is

Chinese territory would not create legal difficulties for the UK

but might be acceptable to the Chinese if they were seeking grounds

for permitting the continuation of British administration. But

equally it might not go far enough for them. And we would still

need Chinese agreement to amendment of the 1898 Order in Council.

18.

We should therefore examine any Chinese proposal on sovereignty

very carefully but only be prepared to make concessions if Peking

were ready to give assurances going well beyond a pragmatic

understanding on land leases and general assurances about Hong Kong's

future stability.

Chinese Representative

There would be no legal

19. Here the problem is primarily political.

problem for HMG in agreeing to the presence of a 'Chinese Representative

in Hong Kong'. As Annex C shows, there was for a short time such

an official after the Second World War. What would matter for us

would be the psychological and political impact on confidence in

Hong Kong.

This would in turn depend partly on the function of

the representative.

20. If the representative simply took up the present liaison duties

of the senior New China News Agency official, which amount in practice

to a diplomatic role, it would be relatively easy to explain the

change as the natural result of improved Sino-UK relations and as

ending the anomaly of the NCNA role. It would be an advantage if

he were from the Ministry of Foreign Affairs as was the case under

the Nationalist Government in the late 1940s. Judging by their

attitude over the title of the proposed visa office, the Chinese

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