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SECRETARY OF STATE'S MEETING WITH THE PRIME MINISTER ON 2 APRIL:
FUTURE OF HONG KONG
POINTS TO MAKE
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1. Chinese seem at last to be focussing on problem. They need
economic benefits of Hong Kong for foreseeable future. But
political difficulties for them.
2.. Hong Kong also important to UK. Hong Kong adds substance
to our relations with Chinese. Significant trade and capital
investment from UK. Population wants Hong Kong to remain British.
Absorption by China' could lead to huge problems.
look to UK for resettlement.
100,000s would
Also much investment from Allies,
eg US, Australia, Japan. Political significance of Western foot-
hold in Far East. Now only 15 years to 1997. Ever-present risk
of collapse of confidence in Territory increases as time passes.
Solution of problem would be major achievement.
3. Need public assurance from Chinese that Hong Kong will remain
under British administration for foreseeable future.
Continued
British administration likely to be most difficult for Chinese to
agree to accept rather than just tolerate a problem left over from
history. They will expect at least our acknowledgement of Chinese
sovereignty.
4.
Objective during visit to get Chinese to agree to negotiations,
if appropriate, spelling out that these would cover a possible deal
on British administration in return for acknowledgement of Chinese
sovereignty.
5. Can offer no concession on sovereignty without clear under-
standing that it is conditional on continuation of full powers of
British administration.
Can be no question of Chinese participation
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