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DSR 11C

almost certainly involve the concession of recognition of

Chinese sovereignty over Hong Kong and thus a major change

in its status that would have to be reflected in UK law.

12. Although some warning signs could appear at an early

stage, confidence within and towards Hong Kong could slip

is the time goes by the threat to the territory's economic very quickly If we judged that there was a genuine threat

and political viability use grows and we

to the Territory's economic and political viability we would

need to calculate very carefully when to approach the

positive

Chinese Government for urgent discussions

too early and

they might not find the symptoms convincing; too late and

the harm might be irreparable. It will almost certainly need to be [made]

at a very high level as only the top

leadership could contemplate a change of policy towards

Hong Kong. The best tactic might be a personal message

from the Prime Minister or Secretary of State delivered

in Peking and/or in London. Its content should probably

not be detailed, and certainly not offer a definitive

solution which the Chinese might feel compelled to shoot

down. Any subsequent discussions should be as simple as

possible. It would be very difficult to obtain Chinese

agreement to any complex formula in time to halt the slide

in confidence.

13. Both in monitoring Hong Kong and Chinese opinion, and

even, in certain circumstances, in discussing solution,

the option of using non-official intermediaries with Peking

needs to be borne in mind. There are a number of potential

'messengers' mainly senior Hong Kong Chinese businessmen

with close contacts in Peking, who might be used. But in

so delicate a matter the question of control is very

important. A message loosely delivered could give a

totally false impression and defeat its own object. Probably

therefore, such intermediaries should only be used, and that

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