CONFIDENTIAL

I.

SECRETARY OF STATE'S DISCUSSION WITH THE

PRIME MINISTER, 2 JULY 1982: CHINA AND HONG KONG

POINTS TO MAKE

CHINESE AMBASSADOR'S DINNER FOR DRIME MINISTER: 12 JULY 1982

1. The Ambassador's dinner is a normal courtesy before the

Prime Minister's visit to China in September. On such

occasions it is not usually Chinese custom to go into

substantive bilateral business, especially if the issues are

contentious.

2. The Prime Minister might like to ask the Ambassador

generally about the current position in China and about the

Chinese view of Soviet policy·

The

3. It would be best to steer clear of the Falklands.

Chinese Government took a pro-Argentina line (based upon

support for a Third World country, though they have made clear

that they see Hong Kong as a different problem to be settled

by peaceful negotiation at the right time). There would not

be much scope for open discussion on this.

4.

There would be no advantage in raising the future of

Hong Kong. The Ambassador is unlikely to do so, though he

might possibly try to probe our position on the issue before

the visit. If he did, the best line would be that the Prime

Minister is looking forward to discussing the problem which

is obviously complicated and moving towards a solution which

would take account of both governments interests and the

continuing prosperity of Hong Kong. There is, of course, no

/harm in

CONFIDENTIAL

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