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PUS'S VISIT TO PARIS 10 OCTOBER
FUTURE OF HONG KONG
POINTS TO MAKE
1.
Sino-British talks through diplomatic channels agreed September 1982. Meetings held Peking. Common aim of maintaining Hong Kong's stability and prosperity.
Meetings on 12/13 July,
2. Second phase of talks began July. 25/26 July, 2/3 August and 22/23 September. Next meeting 19/20 October. Chinese delegation led by Vice Foreign Minister Yao Guang, British by HMA Peking. Governor of Hong Kong participating as appropriate on British side.
3. Content of talks confidential.
4. We aim to seek settlement acceptable to Britain, China and people of Hong Kong. Their views taken fully into account.
5. Chinese propaganda floats Hong Kong as Special Administrative Region (SAR) of China, with considerable autonomy and with lifestyle basically unchanged.
6.
Most Hong Kong people sceptical of SAR idea. Evidence suggests details rudimentary and basis for confidence not grasped. Investors need effective guarantees against Chinese interference. This at present provided by British administration.
7. Central issue is to devise package inspiring confidence. Given agreed common aim, confident this possible.
8. Meanwhile important nothing said or done to damage confidence. This very fragile.
9. Contrary to apparent Chinese beliefs, British Government obtains from Hong Kong revenue only of normal trading partner. Sovereignty
10.
Chinese and British positions well-known. We fully realise importance of sovereignty to China. We are not inflexible. to consider any solution acceptable to Britain, China and Hong Kong. Willing
Confidence in Hong Kong
11.
Underlying state of Hong Kong's economy generally healthy. Cumulative effect of Chinese propaganda campaign is main reason for decline of Hong Kong dollar and of stock market. There is lack of
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