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C.

Hong Kong and Macau

7.

Despite some superficial similarities there are major differences between the systems prevailing in Hong Kong and Macao. The Chinese consider the Portuguese presence in Macao to be very much on their terms. This contrasts sharply with their views of the "unequal treaties" through which we administer

Hong Kong. The Chinese have indicated their intention to recover

sovereignty over Hong Kong at a specific time (1997) rather than (in the case of Macau) "when conditions are ripe".

8.

It is unlikely that the Chinese see Macao as a blue-print for future arrangements in Hong Kong. They have indicated on a number of occasions that the reverse is more the case. Moreover, the information available about China's Hong Kong plan suggests that in general terms they are aiming at much more visible assertion of their sovereignty than would be provided by a secret understanding on the Macao pattern. In any case a secret understanding in respect of Hong Kong would be most unlikely to gain sufficient confidence.

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9. The Governor of Hong Kong has excellent relations with his

opposite number in Macao, whom he met in May 1983 during an official

visit there.

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