3. NEITHER JOHNSON NOR ANY OTHER MEMBER OF THE DELEGATION SAID ANYTHING AT THE MEETING WITH THE GOVERNOR ABOUT THE EXCHANGE ITH WANG BINGNAN REPORTED IN PEKING TUR, BUT MIKE OKSENBERG SUBSEQUENTLY TOLD ME THAT THE SUBJECT OF HONG KONG HAD COME UP IN THE DELEGATION'S MEETING WITH HUAN XIAO (1 Arí NOT CLEAR WHETHER THIS WAS IN PRIVATE CONVERSATION OR IN THE HEARING OF ALL MEMBERS OF THE DELEGATION). HUAN HAD SAID THAT THE BRITISH HAD PUT FORWARD TWO SPECIFIC PROPOSALS REGARDING THE FUTURE OF HONG KONG:
(A) FOR AN EXTENSION OF THE LEASE, WITH THE PAYMENT OF AN ANNUAL
SUM IN RENT, AND
(B) FOR THE ADMINISTRATION OF HONG KONG ON A JOINT STOCK
BASIS (WHICH OKSENBERG THOUGHT MEANT A CONDOMINIUM).
4. MAKING IT CLEAR THAT HE DID NOT EXPECT ME TO REVEAL ANY SECRETS ABOUT THE BRITISH NEGOTIATING POSITION, OKSENBERG ASKED WHETHER THERE WAS ANY TRUTH IN THIS STORY. SINCE ANY OTHER ANSWER MIGHT HAVE BEEN MISUNDERSTOOD I SAID FIRMLY THAT THERE WAS NOT, BUT A NUMBER OF IDEAS OF THIS KIND HAD BEEN PUT FORWARD IN THE HONG KUNG PRESS AND BY INDIVIDUAL HONG KONG PEOPLE.
5. ACCORDING TO OKSENBERG, HUAN XIANG ALSO TOLD THE DELEGATION THAT HE COULD FIGURE OUT WAYS OF DEALING WITH TRADE'' AND SHIPPING AFTER CHINA HAD RECOVERED SOVEREIGNTY, BUT HE WAS STILL NOT CLEAR HOW FINANCE AND THE CURRENCY COULD BE HANDLED.
6. FOOTNOTE. OKSENBERG REFERRED TO FORMER PRESIDENT CARTER'S MEETING WITH DENG DURING HIS TRIP TO CHINA IN AUGUST/SEPTEMBER 1981 WHEN OKSENBERG HAD ACCOMPANIED HIM. THERE WAS MUCH DISCUSSION OF TAIWAN BUT THE QUESTION OF HONG KONG ALSO CAME UP. DENG SAID ''WHY SHOULD WE WANT TO TAKE BACK HONG KONG? WE CANNOT EVEN RUN SHANGHAI WELL. THIS MAY BE WELL KNOWN TO YOU BUT I DO NOT RECALL HEARING IT BEFORE.
SIGNED: R.J.T. MCLAREN
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