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He had discussed his proposals with Deng Xioaping (although when and at what length it was difficult to ascertain):
He was confident that his proposals for the Hong Kong Dollar were sensible and practical:
He was convinced that the Hong Kong Dollar would remain strong and freely convertible on the world's exchanges provided full con- trol over Hong Kong's reserves remained in Hong Kong. Later he added to this the further speculation that it would be essential for the Bank of China to become a note issuing bank alongside the Hong Kong & Shanghai Bank and the Chartered Bank.
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Whilst expressing grave doubts as to whether he was right in these assumptions about confidence in the Hong Kong Dollar in these circumstances, I underlined the fact that if he were wrong then clearly the position. would be disastrous not only for Hong Kong and Hong Kong people but for others too. I also said that in glancing through his proposed speech, I had noted his belief that "Hong Kong" would be an "Independent Special Zone, within China, under the Chinese flag". I asked whether this was his own personal crystal ball gazing, and he replied at once that this part was not, that it was his under- standing when speaking to the Chinese that this would be a definite requirement. Mark Schreiber asked about the possibility (as suggested in the Economist Foreign Report) that the Chinese flag and the Union Jack might be flown together in Hong Kong. Mr. Lee thought this quite out of
the the question and indicated that one major reason was Chinese policy to ensure that nothing would be done in discussion about Hong Kong's future to affect adversely their intentions for Taiwan: that it was anathema to them to have the Nationalist flag flying over what to them was a part of China.
My knowledge of and, indeed, friendship with Dick Lee goes back over 30 years: I have over these years become used to a certain amount of anti-British feeling on his part and, frankly, these last few years can seldom recall a discussion with him in which he had not made some rather snide comment about Britain and British attitudes towards colonial people.
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