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SDP & HK: Rosemary Langford reported from London that Mr. John McKenzie,
former Urban Councillor who is chairman of the HK group of the Social Democratic Party,
had held meetings with Dr. David Owen and Mr. Ian Wrigglesworth and said they were both
very interested in HK. They discussed a draft paper on 1997 which Mr. McKenzie said was drawn up by the HK group which was experienced enough to give guidance and views to the SDP in the UK; the paper also dealt with the British Nationality Act.
Speech by Professor Peter Harris: Professor Peter Harris told Rotary Club on 23 February that the aim of the current Sino-British talks was to allow China to retain its honour and dignity without disturbing the territory's delicately balanced prosperity, and he conjectured that Britain and China were negotiating around the minimum both sides were prepared to give in. If China was agreeable to a minimum titular sovereignty this might retain HK pretty much as it was, provided the Chinese were convinced that honour and dignity was maintained. Professor Harris said there was no such thing as an invalid treaty and the argument was purely political. HK which was becoming more and more international could not be reincorporated into China since it could not realistically continue to operate as a capitalist
boomtown in a Marxist-Leninist desert.
Foreign capital coming to HK: The SCMP Business News reported that foreign capital was flowing into HK and going onto the stock market, into deposits and directly into industry. The article quotes a research manager for a broking firm saying it appeared
that overseas investors were much more optimistic about the future of HK than local people; some believed the political question would be settled favourably as China needed HK to function as it was now. A Monetary Affairs spokesman said at the end of last year total deposits were $234 billion compared with $164 billion at the end of 1981. Foreign currency investments increased from $29 billion to $99 billion.
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Letters: Charles Lam wrote to the SCMP on 23 February saying those who told people to have faith and confidence in Britain over the negotiation of the 1997 issue conveniently forgot Britain's track record in looking after our interests, citing as examples the controversial and racially discriminating British Nationality Act; the EEC textile negotiations; and the increase in UK college fees for HK students. Andrew Tam wrote to the same paper about the "disgrace" of the three treaties, but stated that, no doubt, the three parties involved comprehended that renewal of the lease would mean a lot of mutual benefits to them. But the question was: Would China risk affronting the broad Chinese stand on regaining sovereignty by resuming its ancestors' footsteps and making the deal on a "lease" basis?
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OTHER ITEMS:
Capital Movement: Wen Wei Po quoted from the Budget Speech saying there was a flow of capital into HK, according to the total amount of deposits in HK in 1982. Contrary to this, a number of papers carried a Central News Agency report from Taipei quoting the
CONFIDENTIAL