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PRACTICALLY POSSIBLE TO CONDUCT SUCH EDUCATION IN ISOLATION
WITHOUT GETTING DRAWN LOGICALLY INTO A FIRM STATEMENT THAT BRITISH
ADMINISTRATION IS OUR AIM. HERE WE RISK GETTING INTO THE SAME
DIFFICULTY AS OCCURRED IN 1979. AS YOU POINT OUT IN PARAGRAPH 7 OF YOUR TELNO 275, WE PROPOSED BRITISH ADMINISTRATION THEN BUT
WERE NOT ABLE TO OFFER THE CHINESE ANYTHING IN RETURN.
UNFORTUNATELY THE SAME STILL HOLDS GOOD NOW. THE SECRETARY OF
STATE MADE CLEAR THAT THE QUESTION OF A CONCESSION ON SOVEREIGNTY
IS ONE THAT WILL HAVE TO BE CONSIDERED VERY CAREFULLY BY THE
CABINET. IT IS COMPLICATED BY THE FALKLANDS ISSUE WHICH MEANS
THAT NO FORECAST ON TIMING OF A DECISION CAN BE MADE. THE
SECRETARY OF STATE WILL HIMSELF BE CONSIDERING THE PROBLEM VERY
CAREFULLY AND HOPES TO DISCUSS IT WITH THE PRIME MINISTER BUT
DOES NOT WANT TO RUSH THAT PROCESS.
4. IN THESE CIRCUMSTANCES IT WOULD CLEARLY BE WRONG FOR AN
OFFICIAL BRITISH REPRESENTATIVE (IN LONDON OR PEKING) TO FOLLOW
UP THE DENG/HEATH CONVERSATION, EITHER ORALLY OR IN WRITING. WE
CANNOT RISK A DIALOGUE WHICH MIGHT LEAD TO OUR APPEARING TO PRESS
FOR BRITISH ADMINISTRATION WITH NO AUTHORITY TO OFFER A QUID PRO
QUO.
5.
MEANWHILE THE SECRETARY OF STATE RECOGNISES THAT THERE WILL
BE VISITS TO PEKING BY HONG KONG BUSINESSMEN AND OTHERS WHO COULD
NOT BE PREVENTED FROM TALKING TO CHINESE LEADERS. HE AGREED THAT
TEDDY YOUDE SHOULD USE HIS DISCRETION IN BRIEFING SUITABLE
VISITORS TO ADOPT AS HELPFUL A LINE AS POSSIBLE ON THE ECONOMIC
REALITIES AND IMPLICATIONS WITHOUT COMMITTING HMG.
6. WE ALL REALISE THAT THIS IS NOT AN IDEAL TIMETABLE GIVEN
THE APPROACH OF THE PRIME MINISTER'S VISIT BUT THE FALKLANDS
CRISIS HAS NOT ONLY DELAYED MINISTERIAL CONSIDERATION BUT ALSO
MADE ISSUES SUCH AS SOVEREIGNTY AND ADMINISTRATION MUCH MORE
DELICATE. I HOPE THAT IT WILL BE POSSIBLE TO PUT THE PROBLEM TO
THE PRIME MINISTER WITHIN THE NEXT TWO MONTHS. IF SO, IT WILL BE
VALUABLE TO HAVE YOU IN THIS COUNTRY TO GIVE YOUR ADVICE.
SIGNED A E DONALD
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