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SECRET AND PERSONAL
FM PEKING 030943Z APR 81
TO IMMEDIATE FCO
SECRET
TELEGRAM NUMBER 262 OF 3 APRIL
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INFO IMMEDIATE PERSONAL FOR GOVERNOR HONG KONG
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RECEIVED IN LESISTRY NO. 51
DE CFICER INDEX
PA
Mr. Murrice
Murrice gh Mr. Williamor-
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REGISTRY Action Taken
914.
WHICH WILL BE CLEAR TO DONALD AND SIR M MACLEHOSE, THIS TELEGRAM jaar K
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SECRETARY OF STATE'S MEETING WITH VICE CHAIRMAN DENG XIAOPING
HONG KONG
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1. LORD CARRINGTON SAID THAT HE HAD ALREADY SPOKEN TO HUANG HUA ABOUT THE PROBLEM. HE KNEW THAT DENG HAD JUST REPEATED HIS ASSURANCES ABOUT HONG KONG TO BRITISH JOURNALISTS. THESE WERE OF COURSE ACCEPTED UNEQUIVOCALLY BY THE BRITISH
GOVERNMENT.
2. LORD CARRINGTON SAID THAT, IF THIS WERE JUST A MATTER BETWEEN THE BRITISH AND CHINESE GOVERNMENTS, THERE WOULD BE NO PROBLEM. HOWEVER, DURING HIS STAY IN HONG KONG HE HAD DETECTED A FEELING THERE THAT BECAUSE OF THE BRITISH SYSTEM WHICH OVERLY RELIED ON LEGALITY, THE DATE OF 1997 WAS BEGINNING TO CAUSE UNCERTAINTY
IN THE MINDS OF THE PEOPLE OF HONG KONG, IN SPITE OF DENG'S
ASSURANCES.
BOTH WE AND THE CHINESE GOVERNMENT APPRECIATED THAT THESE WERE NOT REALISTIC WORRIES. HOWEVER, BECAUSE OF THE REVERSE EFFECT OF 1997 ON THE PERIOD IN WHICH LEASES AND MORTGAGES WERE AFFECTED, INVESTORS WERE BEGINNING TO WORRY WHETHER THE LEGAL ASPECT WAS NOT GOING TO CAUSE DIFFICULTIES FOR THEM IN THE FUTURE. LORD CARRINGTON DID NOT WISH TO EXAGGERATE THIS POINT, BUT THOUGHT THAT IT WOULD BE IN THE INTERESTS OF BOTH GOVERNMENTS THAT THE STABILITY AND PROSPERITY OF HONG KONG SHOULD CONTINUE. HE THEREFORE WONDERED (AS HE HAD SUGGESTED TO HUANG HUA) IF IT WOULD BE POSSIBLE TO HAVE A DISCUSSION ABOUT THE PROBLEM AND PERHAPS TO MAKE SOME SUGGESTIONS. THOUGH WE HAD NONE AT PRESENT, WE MIGHT BE ABLE TO COME UP WITH SOME IDEAS ON HOW TO GET OVER THE PROBLEM NATIONALLY WITH DUE REGARD TO CHINA'S
OBVIOUS INTEREST IN THE MATTER
3. DENG REPLIED THAT HE WAS AT PRESENT NOT IN A POSITION TO MAKE TOO MANY COMMENTS ON THIS MATTER. BUT HE COULD STATE SOLEMNLY THAT THE ASSURANCE HE HAD GIVEN REPRESENTED THE FORMAL POSITION OF THE CHINESE GOVERNMENT, WHICH WAS RELIABLE.
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DENG