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SECRET

TELELETTER TO PEKING/HONG KONG

GRS613

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нны очове

A ? NG

TELELETTER

A E DONALD AUSS

FILE REFERENCE HKK 040/1 DATED 17 MAY 1982

FOLLOWING FOR SIR PERCY CRADOCK KCMG PEKING

:

SIR P HADDON-CAVE KBE CMG ACTING GOVERNOR HONG KONG

FUTURE OF HONG KONG

(186)

194

(21

Pasuli

See 2279A

256

283A

1. I AM SORRY THAT WE HAVE BEEN SOME TIME IN REPLYING FINALLY TO YOUR TELEGRAMS ABOUT THE FOLLOW-UP TO MR HEATH'S DISCUSSION WITH DENG XIAOPING (PEKING TELNOS 202, 209, 229 AND 275, HONG KONG TELNOS 328 AND 360, AND FCO TELNOS 194 AND 254 REFER). WE

196 RECEIVED YOUR TELNO 275 AFTER THE MEETING WITH THE SECRETARY OF STATE DESCRIBED IN FCO TELNO 203. I AM SENDING A SECOND TELE- LETTER REPORTING THAT MEETING IN MORE DETAIL. (IT REPLACES THE

PROMISED RECORD BY BAG.) THIS ONE IS INTENDED TO DESCRIBE THE BACKGROUND TO THE DECISIONS AND THE WAY IN WHICH WE HOPE THINGS

WILL DEVELOP.

251

256

See

2. I THINK THAT WE ARE GENERALLY AGREED IN OUR ASSESSMENT OF CURRENT CHINESE THINKING. I PARTICULARLY ACCEPT THE STRESS IN PARAGRAPH 2(B) OF PEKING TELNO 275 ON THE POLITICAL AND OTHER FACTORS INFLUENCING CHINESE THINKING AND THE DIFFICULTY OF

ACHIEVING A SATISFACTORY OUTCOME. I ALSO AGREE THAT THEY HAVE ADOPTED A POSITION WHICH GIVES THEM SOME ROOM FOR MANOEUVRE BUT THAT THEIR PRESENT STAND IS TOO FAR AWAY FROM THE CONTINUATION OF BRITISH ADMINISTRATION TO PROVIDE FOR THE MAINTENANCE OF CONFIDENCE. WE CANNOT BE SURE HOW FAR THIS IS DUE TO A GENUINE LACK OF UNDERSTANDING ON THEIR PART OR TO THE DELIBERATE ADOPTION

OF AN OPENING NEGOTIATING POSITION. BUT IT REMAINS A SERIOUS

OBSTACLE.

3. I APPRECIATE THE ARGUMENT THAT IDEALLY WE SHOULD EDUCATE THE CHINESE FURTHER ON THE ECONOMIC FACTORS UNDERPINNING STABILITY AND CONFIDENCE IN HONG KONG IN ORDER TO AVOID THE IMPLICATION THAT

WE ACCEPT THEIR POSITION. BUT WE DO NOT BELIEVE THAT IT IS

Copel to

PS

Ps/Lord Belstead.

PS/PUS

Mr Gifford

Mr Donald

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Head /RED

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