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Norskande!!
Note of Conversation between HE the Governor and Sir Edward Youde at Government House on
9 April 1981 at 0930
Future of Hong Kong
Analysis of talks in Peking. Sir Edward Youde gave his impression of the talks between Deng Xiaoping and Lord Carrington on this subject. He found Deng's performance
surprising and rather odd. The Chinese themselves had clearly had a hand in pre-empting discussions on the subject by restating their position to the Press before the visit. When Lord Carrington was in Peking, Deng then simply reiterated his standard position that investors should set their minds at ease, that what he said had the support of the Chinese Government and that we should look carefully at what the Chinese had had to say about Taiwan. On the other hand, the Ministry of Foreign Affairs seemed interested in keeping open the possibility of further exchanges on the subject. To an extent the ball was in the Chinese court and Lord Carrington had taken the line that we should hold back until there is a clearer response from the Chinese. Dr Wilson wondered whether Deng's saying 'I can't say anything now' meant that he would be able to in the future. Sir Edward Youde thought that it did not.
2.
Contingency plan. Although we had made every effort to put across to the Chinese the importance and delicacy of business confidence in Hong Kong, we had to have a contingency plan in the event of a slide in confidence. We had to decide now just what would have to be done by us and/or the Chinese to try to stop such slide. Sir Edward Youde therefore proposed that Hong Kong draft a paper listing Hong Kong's possible requirements. The paper would then be subject to an assessment by the Embassy in Peking of what they thought the Chinese would be able to give. The input from Hong Kong and from Peking would then be considered by London with regard to deciding on tactics for dealing with Hong Kong's long- term future.
3.
The discussion then turned on the possibility of the Chinese being prepared to agree to a 15-year period of notice of any intention to alter the status of Hong Kong. This would be the best means of holding confidence, but even this would have to be accompanied by adjustment of the Order in Council to give the Governor the authority to confer rights and grant leases until such time as any period of notice had expired. In the event of the Chinese finding it politically impossible publicly to agree to such a period of notice, we would have to have a number of fall-back positions. These might include their agreeing to the Governor's granting leases expiring after 1997, even though the Chinese would not be bound by any period of notice but would simply respect those rights or leases already granted. Alternatively, we could
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