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(I enclose a copy of Peking telno 1154 containing this). In commenting on the Deng/Thorn exchange, Sir Percy Cradock said that Deng had probably been given a misleading account of a conversation which he, the Ambassador, had had with the Chinese negotiator Yao Guang on 28 October, when Sir Percy had suggested by way of illustration that two of the jobs which might be filled by British people could be the Commissioner of Police and the Attorney General.
On the Ambassador's recommendation, we authorised him to speak to Yao Guang on 8 November in order to clarify the position. (An account of that meeting is in Peking telno 1160, enclosed with my letter of 9 November). Sir Percy explained in detail the ideas which he had put to Yao on an informal basis, making clear that these were intended as examples to be studied in the context of our examination of the Chinese proposals suggested in the Prime Minister's recent message. It followed that we were not thinking of personnel being appointed by the British Government or responsible to London; they would be serving the Government of Hong Kong and engaged at their request.
Yao, who was friendly throughout, was grateful for this explanation but went on to make comments which showed clearly
He that Deng Xiaoping was suspicious of British intentions. commented that it was difficult for the Chinese to believe that the British side were not actually seeking some form of co- administration. He cited as alleged evidence for this the Prime Minister's remarks on Hong Kong in her recent phone-in programme on the World Service. He maintained that because Mrs Thatcher had said that the British view on Hong Kong had not changed, this suggested that our readiness to hold talks on the basis of the Chinese proposals did not indicate any real change of attitude. He added that 'in his view the Chinese side did not agree with the step-by-step approach', suggested by HMG. 'Detailed discussion would be little use where principles had not been clearly affirmed'. Sir Percy refuted Yao's points strongly and succeeded in getting Yao to acknowledge that there was a clear difference between the 'joint administration' about which Deng had spoken and the informal suggestions which the Ambassador had made on 28 October.
In commenting on this exchange, Sir Percy said that the Chinese remained suspicious and that there was a danger of slipping back in the negotiations. The Chinese continued to
He hanker after an explicit affirmation of their premise. proposed that, in order to forestall this, we should be prepared to make at least a general formal statement for the record to the effect that in building on the Chinese proposals as envisaged in the Prime Minister's message we envisage no link of authority between post-1997 Hong Kong and the UK.
The Governor of Hong Kong, who had also been given an account by Thorn of his discussions in Peking, was equally concerned at the possibility of a setback in the talks but strongly opposed a move on the lines suggested by the Ambassador at this stage. He saw it as giving away too much
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