Mr Donald
Sir E Youde
НИК
040/1
RECEIVED IN REGITRY NO. 5]
SECRET
INDEX
2 2 JUL 1981
DESK OFFICER
مد
PA
quh
REGISTRY Action Taken
3012
172
HONG
FUTURE OF HONG KONG
1.
This subject was discussed during Sir E Youde's meeting with Sir P Cradock on 21 July. You and I were also present.
2. The discussion focussed on the minute of 14 July by Mr Davies about his conversation with the Counsellor in the Chinese Embassy, Mr Liang Geng. One of the main questions was whether it would be right for Sir E Youde to take, the cue from Liang Geng and follow up with Ambassador Ke Hua, the discussion which the latter had had with Sir P Cradock in April.
3. On the whole, Sir P Cradock was in favour of such a follow up. He argued that the ball was now in the Chinese court and that there would be no harm and some advantage in maintaining a dialogue with Chinese officials which might help when we came to the sub- stantive discussions. Sir E Youde however pointed out that there could be difficulties if the Chinese asked for further ideas from us and we had not yet got Ministerial authority for them.
(NR
4. Another important factor was the probable visit by the Prime Minister in September 1982. Sir E Youde and Sir P Cradock agreed that it would be impossible for her to avoid raising the question of the future but that it was also very likely that she would in fact not get a substantive reply. This in turn could affect confidence
in Hong Kong.
5. It was agreed that the department would press on as quickly as possible with the preparation of the contingency paper on options which might be put to the Chinese. We will do this. The paper is at present being considered by the Attorney-General's Office.
6.
It was left that Sir E Youde would consider further whether or not to take the matter up with Ambassador Ke Hua. My own recommend- ation on this point is that we should be extremely cautious in going too far before we get our own ideas sorted out with Ministerial authority. Otherwise we risk a meaningless dialogue with the Chinese who would certainly not volunteer anything themselves; there could indeed be difficulties if we got too far in discussion of the narrow land lease question since it is now the view of the Governor of Hong Kong that an arrangement on these lines would not be enough to maintain confidence for long. Moreover, I believe that it is quite possible that the current gestures from Liang Geng have their origins in the Chinese. MFA who are not the lead department on this subject. That lies with the Hong Kong/Macao Work Committee.
21 July 1981
cc Mr Davies, FED
Mr McQuade, HKGD
R D Clift
Hong Kong and General Department
SECRET