1 Dft. to No 10 SECRET
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1.
FUTURE OF HONG KONG
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I have considered the attached submission carefully in the light of the proposed visit by the Prime Minister to China next year, and the way in which we should lead up to this. My own visit to Hong Kong and China in January needs to fit into this.
2. I agree with the recommendation in the submission that it is important to get the Prime Minister's agreement to pay a visit to China in September 1982 and to do this soon. There are important reasons, in terms of our bilateral relationship with China and the international political scene, which argue strongly for a visit.
I would hope very much that we could get the Prime Minister to go firm on this before I leave for the Far East.
3.
It is equally important that we should make clear to the Prime Minister that, if she goes to Peking, she will have to raise the question of Hong Kong and that this in turn could create problems, because of the expectations which will be aroused in Hong Kong and elsewhere that some kind of solution is imminent.
4. However, I do not think that it would be right for your letter to the Prime Minister to go as far as the original draft. In particular, it should not put a draft OD paper to her at this stage. The latter raises major questions of substance on Hong Kong which the Prime Minister would certainly wish to take time to consider. This applies particularly to a possible concession to the Chinese on sovereignty over Hong Kong. In my view it would be best to take two bites at this exercise and to submit to her on the substantive issues after my visit, perhaps with the idea of putting an OD paper to colleagues in the Spring.
5. If the Prime Minister agrees now to a September visit, we need to work out what I should say to the Chinese in Peking about Hong Kong. As always in dealing with this problem, we have to steer a careful course between keeping the question in their minds and appearing to make premature proposals which might invite a rebuff. Obviously I should at the least recall what you said to Deng Xiaoping and others last April. But we know that the Chinese are very reluctant to come to grips with this problem. We cannot tell when they will be ready for substantive discussions.
6. The Ambassador in Peking would like us to aim for a fairly strong pitch possibly even leading to negotiations - during the Prime Minister's visit and for him to give clear advance notice to the Chinese that we hoped to make progress then. The Governor of Hong Kong believes that we should move more cautiously ideally he would
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