DSR 11C
SECRET
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in particular, who has put much-stress on the question of
sovereignty--would-react-badly-if tackled on-the-British
however
-administration point It might be best to feed our ideas
in at a high level in London, possible in a meeting between
the Secretary of State or the Prime Minister herself and
the Chinese Ambassador.
9. A further aspect concerns the possibility suggested by
Sir Y K Pao of linking some form of economic assistance to
China with the search for a solution to the Hong Kong
}
problem. We have already (at the prompting of Sir P
Cradock) been examining the possibility of a substantial
increase in aid to China, a field in which we have been
falling behind our competitors. It is very unlikely that
the Chinese would be prepared to offer concessions over
Hong Kong in return for economic inducements of this kind.
But progress over Hong Kong may be difficult if the Chinese
have reasonable grounds for criticising our aid performance
This will need further discussion in Whitehall.
/ 10.