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LORD
PRIVY
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U
favour leaving the problem until weakening confidence in Hong Kong forces the Chinese to talk. However he recognises that the Prime Minister's visit injects a new factor. Both he and the Ambassador would therefore like me to give to the Chinese a fairly full expose of the legal problems connected with 1997 and to emphasise the difficulties caused by the ending of British administration in the New Territories in 1997.
7. In my view, this would be going too far. Even if I were to put forward ideas on the basis that the Chinese might chew them over before the Prime Minister's visit there would be a risk of their turning them down on the spot, particularly if they got the idea that we were trying to bounce them into agreeing now to our staying on beyond 1997. I think therefore that I should adopt a fairly low key approach, repeating what you said in April and expanding on this judiciously if the Chinese prove receptive. I should certainly not put to them any proposals for a solution. Quite apart from anything else we do not want to commit the Prime Minister before she has studied the matter fully.
8.
I attach two drafts:
a)
b)
a re-drafted letter from you to the Prime Minister;
a draft of the line I should take in Peking, subject of course to amendment in the light of the Prime Minister's views.
9. I think we should discuss this.
11 December 1981
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Ha.