SECRET
FUTURE OF HONG KONG
BACKGROUND
DSR 11C
1. The Prime Minister is aware of the background on the Future of Hong Kong.
2. Dr Mahathir passed through Hong Kong in January and discussed the future with the Political Adviser. He said Malaysia were keeping a close eye on developments. He found it hard to believe that the Chinese would not interfere in
Hong Kong if it became a SAR.
3. His Foreign Minister, Ghazali, had talks in China with
the then Foreign Minister Huang Hua in November 1982.
Huang Hua gave Ghazali a very misleading account of the talks with Mrs Thatcher in Peking. He suggested that a phased take-over
had already been agreed with the British and that investors
and others would see no difference after 1997.
Ghazali may have been reassured by this; but Dr Mahathir seems to take a less sanguine view but would probably be unwilling to go far in putting this to the Chinese.
4. Malaysia has considerable investment in Hong Kong. Some
Malaysian fingers have been burnt as a result of the sharp
fall in property prices there in recent months. Like other
ASEAN countries Malaysia can be expected to try to benefit
from any investment which might be directed away from Hong
Kong.
THIS IS A COPY
THE ORIGINAL HAS BEEN RETAINED
IN THE DEPARTMENT UNDER
: SECTION 3 (4) OF THE PUBLIC RECORDS ACT 1958
SECRET
: