-2-
6.
Peking have previously preferred not to face up to Hong
Kong problem. But 1997 New Territories deadline has to be faced
before worries damage confidence in Hong Kong.
China's relations with Hong Kong
7.
Never been more extensive or cordial. Growing relationship
with Guangdong and Fujian Provinces: trade, traffic, joint
ventures in SEZ.
China's relations with the UK
8.
Never been better. Good cooperation in a number of areas.
Hong Kong / Falklands
9.
well.
Two very different problems. Present Hong Kong system works
Chinese believe in peaceful negotiations over Hong Kong.
Wishes of the people of Hong Kong would be taken into account.
Our constitutional responsibility to Hong Kong undiminished.
(Some 450 Hong Kong Chinese are serving with the Task Force).
Future of Hong Kong
10. UK's Lease of New Territories expires in 1997. Hong Kong's
future must be considered as a whole (Island, Kowloon and New
Territories together). UK and China now focussing on the problem.
Chinese assurances to Lord Carrington and Mr Atkins that confidence
and prosperity should be maintained. Continue as free port and
financial centre.
11.
Prime Minister to visit China and Hong Kong in September.
Future certain to be discussed. Unwise to force the pace.
12. Now a live issue in Hong Kong. Subject of much rumour.
High expectations of progress during Prime Minister's visit need
to be discouraged. Avoid upsetting investor confidence in Hong
Kong.
/13.