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ANNEX A
DSR 11C
IMPLICATIONS FOR HONG KONG OF CHINA'S POLICY ON TAIWAN
1. The leaders of the People's Republic of China aim to
achieve the take-over of Taiwan in such a way as to ensure
the maximum benefit and the least possible damage to China's
interests. While they do not rule out the use of force
as a last resort they express hope that reunification can
be achieved peacefully through negotiations between them-
selves and the leaders of ruling Kuomintang (Nationalist)
Party on Taiwan.
2. The essence of China's proposals on Taiwan (put forward
on several occasions in the last 3 years) is that in return
for acceptance by the Taiwan authorities of unification,
China would 'respect the status quo on Taiwan
•
and
adopt reasonable policies and measures so as not to cause
any losses to the people on Taiwan'. China says that it
would allow Taiwan to retain its own armed forces, would
abstain from interference in the local affairs of the island,
would leave Taiwan's 'socio-economic system' unchanged,
with 'no encroachment' on the investments and rights of
inheritance enjoyed by the inhabitants, and would permit
Taiwan businessmen to invest on the mainland.
These points
were reaffirmed on 30 September 1981 by Ye Jianying (China's
equivalent to Head of State), who added that under the
arrangements envisaged by Peking 'people in authority' from
Taiwan could assume national leadership posts and 'participate
in running the state'.
3. On some previous occasions, Chinese officials had said
that authorities on Taiwan would have to give up the use
of such attributes of national status as the 'Republic of
China flag, but China has not explicitly repeated this
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