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colonial power, concerned to avoid another colonial fiasco.
(d) Introduction of any ideas of financial inducement is
exceptionally delicate. The Prime Minister might refer to her aspiration to replace the 19th Century Treaties with a new Anglo-Chinese Treaty of Friendship and Cooperation, binding us more closely in a number of ways on the bases of equality and mutual benefit. But the possibility of a financial inducement is far better explored through intermediaries. For it to be given its first airing in a formal meeting, very much on the record, could well backfire.
In your paragraph 12 you deal with the practical indivisibility of the ceded areas and the New Territories. What you say seems entirely right although the third sentence seems to contain a non-sequitur until read in the context of the final sentence. I would be inclined to make a separate sentence of the point about the economic life of the ceded areas depending on free movement, access etc. This could be followed by a further sentence, taking in the present opening: ''Once the New Territories... governed on its own as a colony'', but adding a phrase like ''without an exceptionally close relationship and harmony of policy with the PRC authorities administering the New Territories''. The fact that the PRC regard the existing colony ¡ as indivisible does not mean that is so in all circumstances. If only for tactical purposes we should, I think, retain the option of presenting a suggested solution based on the opposite case at a later stage if we wish to.
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Another general point is that we must avoid being too persuaded that ''sovereignty'' is a key that can open the door to a solution that would suit us. It is clear that many influential Chinese want not only a recognition of rightful Chinese sovereignty: they want a complete end to the British colonial presence. This is a strong emotional reaction, a desire to end a national humiliation, quite separate from any juridical concepts.
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On points of detail:
I suggest you delete ''in Chinese There is nothing distinctly
(a) Para 10, last sentence: Government doctrine''. Communist or doctrinaire about this view.
(b) Para 11, second sentence: ''sphere of influence'' might be replaced by ''jurisdiction''. The Chinese have considerable influence over Hong Kong.
(c) Para 13, third sentence: the Chinese naturally think
that people like Y-K Pao have as much ''skill at administration and financial management'' as we. they consider Britain to be in decline as they progress and modernise.
(d) Para 15: the PRC's 1972 démarche at the UN was not
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