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CONFIDENTIAL
CALL BY THE RT HON DR DAVID OWEN MP 19 AUGUST:
FUTURE OF HONG KONG
POINTS TO MAKE
1.
Understand you will be touching on Hong Kong's future in a
speech in Hong Kong. Some background information might be helpful.
Very complex and sensitive question. Both we and Chinese actively
studying, particularly since Mr Atkins' visit in January.
2.
Chinese have made it clear in recent months that they realise
need for firmer assurances if business confidence is to be
maintained.
3. But while China's economic gains from Hong Kong are great,
political inhibitions are strong in Peking, making it difficult for
them simply to acquiesce in the continuation of the status quo.
They appear to find it hard to accept that confidence is dependent
on British administration, the legal system and independent
convertible currency. They are also making a strong pitch for
their sovereignty over the whole territory to be recognised.
PRIME MINISTER'S VISIT
4. Future expected to be discussed during visit to China.
Continuing process, to build on Mr Atkins' discussions and to take
things further. Wrong to expect solution then but we are conscious
of the need to reach and make public an acceptable settlement soon.
We think it must provide for continuation of effective British
administration.
5.
Hong Kong opinion very important and interests of the people
must be taken into account. Hong Kong Government are monitoring and
we are giving thought to this. Group of Unofficials to come here
in September to make known their views.
/Hong Kong Stock
CONFIDENTIAL