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NOTE OF A CONVERSATION OVER LUNCH BETWEEN

MR A E DONALD CMG, AUSS, FCO, AND CIA ANALYSTS IN WASHINGTON ON 1 DECEMBER 1983.

HONG KONG

1.

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2.

Mr Donald said the Chinese position was unlikely to vary, however the internal political debate in Peking developed. They argued that, if Britain admitted the principle of Chinese sovereignty and administration post-1997, everything else was negotiable. He believed their suggestion of a deadline of next September referred to agreement on principles, and that all the details could be settled in slower time. Even before the talks began there had been hints at China wanting a settlement by mutual agreement and securing British cooperation.

3. The question of sovereignty remained unresolved. The Prime Minister had attempted to finesse it in a letter of last March, but the Chinese had remained dissatisfied, alleging that we were offering China only titular sovereignty in exchange for British administration. Peking remained intensely suspicious that Britain intended to keep running the colony in Hong Kong after 1997. (They were also suspicious that we might perversely try to quit Hong Kong earlier than 1997.) Talks had continued, with both sides sheltering under the separate umbrellas of their respective positions. But we had not been standing still. In the course of the most recent rounds, we had succeeded in getting across to the Chinese some papers containing our ideas for the administration of Hong Kong post-1997, and we would be giving them more papers on progressively more difficult subjects. was in both sides' interest to reach an agreement through negotiation.

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4. In response to questions about the situation in Hong Kong, Mr Donald said that it had been difficult for people there to grasp that the status quo could not continue after 1997. The Chinese had talked informally about there being no change in Hong Kong for 50 years after 1997, but this of course pre-supposed that we had reached agreement with China on new arrangements before then to take the place of the present ones.

He was confident that the Chinese understood what was going on in Hong Kong. There were still the remnants of the old direct channels established by Chou En-lai. Chinese propaganda was now talking about elections or more democracy in Hong Kong. We had always resisted elections because of the danger that this would lead to confrontation between pro-Peking and pro-KMT factions. The apparently contradictory Chinese demand for elections might conceal a Chinese hope that it would be up to Britain to establish a mechanism whereby the Hong Kong 'patriots' would emerge as the controlling force in the local government.

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