CODE 18-77
SS 8/78
Mr Elliott
FUTURE OF HONG KONG
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285-
Reference
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fans 816
1. You will wish to see Mr Coxs imaginative suggestion for an alternative approach to the problem of the future of Hong Kong. The premise, with which I agree, is that it will be very difficult for the Chinese to enter, on terms that we can accept, into an agreement that does not become operative until 1997. The aim is to remove the necessity for so doing whilst at the same time avoiding the uncertainty that would result if matters were simply set aside.
2. Mr Cox's proposals would have a political appeal for the Chinese. Politically they should not be difficult for us: indeed they offer the attraction of reducing the likelihood of a long negotiation ending in a messy compromise. But I believe business would find it very difficult to live with the uncertainty as to the timing of rendition that these proposals imply (11(2) 111(3) and (4) and IV(1)). Current confidence rests largely on the assumption that nothing will change at least until the mid-90's, when a transition running up to 1997 might begin. This would be undermined by what is proposed however much nodding and winking went on. Moreover the hoisting of Chinese flags and the appointment of a Chinese Resident Representative would add to that unease, because, with what is said about reversion at any time, both would be seen as signs of the beginning of an early end.
3. We have to balance the need to meet Chinese political require- ments against consideration for business confidence without which our interest in Hong Kong subsides. Acknowledgement by us of PRC sovereignty is, I think, generally agreed to be a minimum Chinese requirement. A further requirement is likely to be participation in the administration of the territory: that might be met by Mr Cox's flag and representative proposals. Might not natural Chinese determination to remain uncommitted on timing of final reversion be overcome by means of a notice clause generous enough to satisfy the business community?
MABT Kami
25 May 1982
Cc: Mr Clift, HKGD
Mr Williamson, HKGD
PA B Thomson
Far Eastern Department
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M. McQuade injurer of newidian wo
I agree; any
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Mr. Williampong HR + Peking!
HK
#2618
There really must be a meeting this soon. Earugh minuty
Play A
See para 3 of Mr Clifty minute of 25 May it-
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