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(610)
4. Sir P Cradock's assessment of the progress of the talks and of
the prospects for the resumption in September are in Peking Telno 764. The Department is preparing, in consultation with Hong Kong
and Peking, a paper summarising the present position and
HKKoud4reappraising our strategy. This is intended for discussion on 1
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September. It will be submitted separately later in the week.
5. FCO Telno 537 authorised Peking to make representations to the
Chinese. Chargé D`affaires in Peking called on Assistant Minister
Zhou Nan on 18 August. Peking Telnos 812-4 report and comment on
the call. Zhou Nan attacked the British position in the
negotiations very strongly. There is no doubt that the temperature
has risen, and that the Chinese are under instructions from the top
to increase the pressure. One point on which Zhou put some stress was the Chinese objection to our consultation with EXCO. This
reiterated a remark by Yao Guang in the talks. We could see this line developed. Our response must be robust but carefully thought
out. We are considering separately.
Chinese propaganda campaign
6.
The Chinese behaved with restraint during the July/August
talks. There is now however evidence that they are resuming and intensifying leaks and propaganda, with the aim of undermining HMG's negotiating position and giving the impression that the resumption of sovereignty by China is inevitable. The main example of this was the People's Daily report on an interview given by Communist Party Secretary Hu Yaobang to Japanese reporters on 15
August. Hu told them that China would recover sovereignty over Hong Kong by 1997 and that the talks were only to discuss how to maintain the territory's prosperity and stability and to ensure a smooth transition. Peking telnos 799 and 800 give details and
comment.
HKK049/47. We have also been watching the movements of Xu Jiatun, the
newly-appointed head of the New China News Agency in Hong Kong. seems to have been playing a much more public role than his predecessor, and recently paid a well-publicised visit to the
He
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