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THIS SITUATION COULD LEAD TO THE RAPID DISPERSAL OF THE CAPITAL
AND INDUSTRIAL RESOURCES OF H.K. WITHIN THE NEXT FEW YEARS UNLESS
CLEAR AND FIRM ARRANGEMENTS FOR THE MEDIUM TERM FUTURE ARE AGREED
BETWEEN THE CHINESE AND BRITISH GOVERNMENTS AND ANNOUNCED TO THE
PEOPLE OF HONG KONG. IF THE CHINESE AGREE THAT IT WOULD BE
DESIRABLE TO REMOVE THE PRESENT CERTAINTY ABOUT THE DATE OF THE TERMINATION OF BRITISH ADMINISTRATION, THE ARRANGEMENTS WOULD NEED TO INCLUDE REPLACEMENT OR AMENDMENT OF THE PRESENT PROVISIONS
OF BRITISH LAW IN A MANNER WHICH WOULD NOT PREJUDICE CHINA'S
POSITION WITH REGARD TO HONG KONG.
THIS IS A MUTUAL PROBLEM WHICH THE CHINESE GOVERNMENT HAVE
ALSO NO DOUBT STUDIED. WE SHOULD BE INTERESTED TO HEAR THEIR IDEAS.
UNQUOTE.
4. I DO NOT THINK THAT THESE POINTS SHOULD BE MADE AT A LEVEL
LOWER THAN THAT OF FOREIGN MINISTER. SINCE THERE CAN BE NO GUARANTEE THAT THE CIRCUMSTANCES OF A MEETING WITH HUANG HUA OR ANOTHER SENIOR CHINESE LEADER WOULD PERMIT A PROPER EXPLANATION, OR THAT THE NUANCES WOULD BE CORRECTLY INTERPRETED AND RECORDED
THERE MIGHT BE ADVANTAGE IN HAVING A PIECE OF PAPER AVAILABLE
WHICH COULD BE HANDED OVER.
5. YOU WILL NOTE THAT THE ABOVE INCLUDES A SPECIFIC REFERENCE TO BRITISH ADMINISTRATION OF HONG KONG WITHOUT THE NEW TERRITORIES BEING IMPOSSIBLE. I DO NOT THINK THIS HAS BEEN SAID TO THE CHINESE BEFORE. I THINK IT TIME TO DO SO.
6. PARAGRAPH 4. SUGGEST ADD AFTER SECOND SENTENCE WHILE FACED WITH
THE CERTAINTY, UNDER BRITISH LAW, OF TERMINATION OF THE PRESENT ADMINISTRATION IN 1997 WITHOUT KNOWLEDGE OF ITS SUCCESSOR''
7. I AGREE GENERALLY WITH THE LINE SUGGESTED IN PARA 5 SHOULD THE
CHINESE ASK FOR SPECIFIC VIEWS. I SHOULD HOWEVER PREFER THE FOURTH SENTENCE TO READ: QUOTE SHOULD AIM TO RECOMMEND MEASURES TO
MAINTAIN CONFIDENCE OF INVESTORS IN HONG KONG IN THE MEDIUM TERM UNQUOTE: AND TO OMIT THE FIFTH SENTENCE.
9. I ALSO THINK IT IS FOR CONSIDERATION WHETHER, IF ASKED, THE LPS SHOULD BY WAY OF EXAMPLE MENTION ONE OR TWO OF THE OPTIONS IN THE BACKGROUND PAPER, BUT WITHOUT MENTIONING ACKNOWLEDGEMENT OF CHINESE SOVEREIGNTY WHICH SHOULD BE RESERVED FOR THE P.M. UNLESS THE LPS OFFERS SOMETHING SPECIFIC THERE WILL BE NOTHING FOR
THE CHINESE TO FORM A STARTING POINT FOR THE EXCHANGE OF VIEWS BETWEEN OFFICIALS REFERRED TO.
I ALSO AGREE WITH THE PROPOSED PRESS LINE, THOUGH THE REFERENCE IN PARA 8 TO HUA GUOFENG MIGHT BE BETTER OMITTED.
MACLEHOSE
LIMITED
HK&GD
FED
SIR E YOUDE MR DONALD
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