DE
CHMMONS
LONDON SWIA QAA
2007, direct line;
31 1000 switchboard)
se}
31st August, 1982.
Yes
Dear Prime Minister,
As you know, your visit to Peking and Hong Kong is a matter of great interest in Hong Kong because of what you will have to say about its future. As I think I am the only Member of Parliament born in Hong Kong, and one who has maintained an interest in its develop- ment for the 20 years since I entered Parliament, I hope you will allow me to offer some suggestions.
The future of Hong Kong and its five million inhabitants lies in its continuing role in the economic development of China. This was the theme of my speech in the House on 11 April 1963, when I had the first debate on Hong Kong in the House since the war. I enclose a copy, as it is still relevant. I also enclose a copy of a document from the Hong Kong Prospect Institute, which I expect you too have received, giving what seems to me a realistic political analysis of the position, and suggestions which I would support.
However to cement interests on all sides more specific steps might be taken:
1.
China might declare a "special economic zone" adjacent to the New Territories, stretching towards and perhaps including Canton.
2. Britain and China would declare that it was their intention to foster the integrated economic development and harmonisation of economic and social conditions in the "special economic zone" and in Hong Kong.
3. The "special economic zone" would remain wholely under Chinese administration which would seek to realise for the "special economic zone" the economic development achieved in Hong Kong. Britain would recognise the ultimate sovereignty of China over the whole of Hong Kong, but would accept the indefinite continuation of its role in Hong Kong, with the nature and role of particular institutions being progressively harmonised with those of the "special economic zone".
4. As a first step the Bank of England and the Bank of China, together with Hong Kong interests, would have talks about the gradual development of a financial system in which Hong Kong and the "special economic zone" operated together as an open financial system integrated with the international financial system.
5./