SECHET
HILD
562
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Forein and Commonwealth Office
НКК 04015
RECEIVED IN MAGISTÄY
London SW1A 2AH
14 NOV 1983
10 November, 1983
Dear John
Future of Hong Kong
WARN
Faten
With my letter of 9 November I enclosed a telegram which Mr Luce had sent to Sir Geoffrey Howe in Athens commenting on recent exchanges between Sir Percy Cradock and the Chinese negotiator. This letter provides a round-up of recent developments.
As you know, the Chinese reacted reasonably favourably to the line which our negotiators took at the meeting on 19/20 October. In consultation with Hong Kong and Peking papers have been prepared on the Hong Kong legal and financial systems, suggesting ways in which safeguards might be built in after 1997. These were passed to the Chinese Ministry of Foreign Affairs on 4 November. A further paper, on external economic relations, will be ready to be passed, over at the next session of talks on 14/15 November.
A
The Chinese have continued to play down their propaganda. In Hong Kong and elsewhere there has been a very marked reduction in criticism of the Hong Kong authorities and HMG. The exception has been over the question of the 'deadline' in September 1984. Here there has been some confusion. Chinese Vice Foreign Minister was reported last week as having indicated to a group of Japanese journalists that negotiations could continue after that date. He appears in fact to have been misreported. The Chinese accordingly felt they had to issue a number of corrections including a firm statement on 9 November by the Ministry of Foreign Affairs to the effect that they would definitely issue a statement in September 1984 whether agreement had been reached with HMG or not. In essence we see no change in the Chinese position on the deadline.
A more worrying development came when Deng Xiaoping received M. Gaston Thorn, the President of the European Commission on 5 November. He gave Thorn a very full survey of the position reached in the talks and included detailed criticism of HMG's attitude. His line was that the position taken in the Prime Minister's message delivered before the last round of talks was still unsatisfactory to Peking. He maintained that we were still seeking some kind of directing role in Hong Kong's administration after 1997. He described this as an effort to establish 'co-administration' or
'administration of the territory in disguise'. He added that the British attitude had shown some changes but their actual ideas had not. M. Thorn told European Community Ambassadors in Peking about his conversation with Deng. He did not consult Sir Percy Cradock beforehand but he did subsequently provide a full record of his conversation with Deng.
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