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FM FCO 0131135Z DECEMBER 1983

TO IMMEDIATE WASHINGTON (PERSONAL FOR AMBASSADOR)

TELEGRAM NUMBER 2082 OF 14 DECEMBER

INFO PRIORITY PEKING (PERSONAL FOR AMBASSADOR)

AND PRIORITY HONG KONG

FUTURE OF HONG KONG: BRIEFING THE AMERICANS

HKK0405

RECEIVED...

1 TO UPDATE THE BRIEFING WHICH DONALD GAVE WOLFOWITZ ON 2

620 DECEMBER (MY TEL NO 845 TO PEKING), YOU MAY USE THE FOLLOWING

WITH YOUR SENIOR OFFICIAL CONTACTS.

2 THE SEVENTH ROUND OF SINO-BRITISH TALKS, ON 7/8 DECEMBER WAS

AGAIN DESCRIBED AS USEFUL AND CONSTRUCTIVE AND THE MENTION OF

PROGRESS WAS HELPFUL. THE NEXT ROUND WILL BE ON 25/26 JANUARY,

AGAIN IN PEKING. THE LONGER GAP OF COURSE REFLECTS THE INTERVAL

BETWEEN SIR P CRADOCK'S DEPARTURE AND MR EVANS' ARRIVAL.

3 THE ATMOSPHERE WAS WARMER AND THE DISCUSSION MORE POSITIVE

THAN AT THE LAST ROUND. WE SEEM TO HAVE REASSURED THE CHINESE

THAT OUR WILLINGNESS TO BASE DISCUSSION ON THE CHINESE SET OF

PROPOSALS (NEXT TWO WORDS UNDERLINED) WITHOUT PREJUDICE DID NOT

CLOAK ANY SCHEME FOR A CONTINUING BRITISH AUTHORITATIVE LINK

AFTER 1997. THE CHINESE REFRAINED FROM SEEKING EXPLICIT

REAFFIRMATION OF THEIR SOVEREIGNTY/ADMINISTRATION PREMISE AND

WERE MORE WILLING TO DISCUSS PRACTICALITIES.

4 DISCUSSION CENTRED MAINLY ON THOSE AREAS OF THE CHINESE

PROPOSALS WHERE WE BELIEVE WE MAY REACH COMMON GROUND. DRAWING

ON OUR INFORMAL WORKING PAPERS, WE SUCCEEDED IN GETTING THE

CHINESE TO EXPAND THEIR THINKING ON HONG KONG'S:

(A) LEGAL SYSTEM SEMICOLON

(B) FINANCIAL SYSTEM SEMICOLON

(C) EXTERNAL ECONOMIC RELATIONS.

5 THERE EMERGED COMMON GROUND IN SOME AREAS, ESPECIALLY ON (B) AND (C). BUT ON OTHER POINTS, MUCH MORE WORK IN NEEDED. SOME OF THE CHINESE IDEAS RUN COUNTER TO THEIR ASSERTION OF

'BASICALLY NO CHANGE'. WE AGAIN STRESSED THE NEED FOR THE

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