PS/LPS
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RECEIVER AN INDOYY NO. 51
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REGISTRY
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Plus 10/2
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FUTURE OF HONG KONG
1. I have discussed with Mr Donald the next moves on this subject following the LPS's visit to the Far East. Since he will be leaving tomorrow to accompany the Secretary of State to South East Asia, Mr Donald would prefer that a substantive submission should await his return. He would, however, like the LPS to see a draft of what we have in mind. I attach this.
2.
The draft provides some analysis of the latest Chinese remarks, drawing particularly on Sir P Cradock's telegram of comment. It focuses on the question of sovereignty, which is clearly a key issue with the Chinese, and is likely to be our most important bargaining counter. It attaches a draft minute from the S of S to the Prime Minister summarising these points.
3. It is quite likely that by 10 February, when Mr Donald returns, we shall have recent comments from the Governor of Hong Kong. We could incorporate these in the final submission.
26 January 1982
R D Clift
Copies to:
Mr Donald
Mr Elliott
FED
SECRET
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