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(iv) Central issue: to devise package assuring
continuity and inspiring confidence. Given agreed common aim, confident this possible.
(v) Meanwhile important nothing said or done to damage
confidence in Hong Kong or atmosphere of talks. Grateful
your understanding.
(vi) Chinese propaganda floats Hong Kong as
Special Administrtive Region (SAR) of China, with
considerable autonomy and lifestyle basically unchanged.
(vii) Most Hong Kong people sceptical of SAR idea.
Evidence suggests details rudimentary and basis for
confidence not grasped by Chinese. Investors need
effective guarantees against Chinese interference.
at present provided by British administration.
(viii) We do not obtain revenue
obtain revenue from Hong
from Hong Kong nor
we colonialist aspirations. We want best possible deal
for Hong Kong people.
Sovereignty
This
Kong nor have
(ix) Chinese and British positions well-known. We
fully realise importance of sovereignty to China. We are
not inflexible. Willing to consider any solution
acceptable to Britain, China and Hong Kong.
Confidence in Hong Kong
(x) Hong Kong's economy generally Confidence in Hong
Kong healthy. Cumulative effect of Chinese propaganda campaign is main reason for decline of Hong Kong dollar
and of stock market. But Chinese propaganda has recently
eased. Recent measures taken by Hong Kong Government have
helped stabilise the dollar.
BACKGROUND (NOT FOR USE)
2.
The Prime Minister is aware of the background to the future of Hong Kong.
3. The Germans have some interest in this subject. The
FRG is Hong Kong's third largest market for domestic
exports. There is a strong German business community in
Hong Kong, and considerable German investment there.
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