CODE 18-77
SS 8/78
SECRET
Reference
CHECKLIST:
THE GOVERNOR'S COMMENTS ON THE FUTURE PAPER
Paragraph 8 of the letter
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On paras 11-12 of the summary, below (6(d)). The Governor suggests we mention that we may not be able to obtain a solution on leases without touching fundamentals. This is implied in conclusion (b)(paragraph 13 of the summary), but we could spell it out more plainly.
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Agreed. On point (ii), as option (e), Annex C, is our best solution, we should not dismiss it so readily. I suggest a less definite: 'This may prove to be a sticking point with the Chinese'.
On (c) Paragraph 4 of the Commentary
(paragraph 5 of the paper), we should put
we should put 'change the economic status quo' rather than 'damage the status quo'.
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(a) and (b) agreed.
The re-draft of paras 6-7 is fine, subject to some reduction. The section on sovereignty ((b) refers) should be revised taking Mr Rushford's comments into account. (iv) agreed.
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On (b) we could meet the Governor's point on economic benefits in our reference to Annex B in paragraph 20. Paras 21-25 deal only with political considerations. (c) agreed.
(d) The Governor would like us to re-cast the section on impli- cations for HMG (our paragraph 28) under three headings: problems in the event of (a) a 'Hankow' solution; (b) a 'Macao' solution; (c) no solution at all. These problems however apply to a greater or lesser degree to all the options, and I think it is preferable to abide by the present arrangement of the material i.e. to discuss the problems individually in the text and under option headings in the annex. We could meet the Governor part-way by introducing the 'Hankow' and 'Macao' scenarios as probable 'final solutions' the Chinese might accept in paragraph 27.
Annexes (i) agreed, and (ii), subject to discussion with the Economists.
(iii) Agreed that any agreement would need to be publicly known. Suggest option (b) should be 'by formal agreement' and (c) 'with Chinese acquiescence'. I think the implications under (b) state Any solution the position fairly except perhaps the last point. short of absorption by China will only postpone the problem. should perhaps be deleted.
(b)(ii) Agreed. On (iii), we will need to compromose. 'may not be sufficient
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Agree that we can delete reference to the legal problems as this mentioned in the previous paragraph.
(c) Agreed. A sentence covering this can be inserted under 'implications'.
(d)
Suggest 'possibly' before 'citizenship'.
(f) All the options are in a sense transitional.
I do not think
we should be sidelining what we think are the best options as that is not in our brief.
Additional Amendments (last page)
Agreed.
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