CONFIDENTIAL

CAS VISIT TO HONG KONG AND CHINA : 4-16 JANUARY 1984

BACKGROUND

FUTURE OF HONG KONG

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1. The Prime Minister visited China and Hong Kong in September--

1982.

2. During her visit to China, the first ever by a British Prime

Minister in office, one of the subjects discussed was Hong Kong.

The following statement was issued after a meeting between Mrs

Thatcher and Chairman Deng Xiaoping on 24 September:

"Today the leaders of both countries held

far-reaching talks in a friendly atmosphere on the

future of Hong Kong. Both leaders made clear their respective positions on this subject.

They agreed to enter talks through diplomatic

channels following the visit with the common aim

of maintaining the stability and prosperity of

Hong Kong".

3. Meetings in Peking to follow up the Prime Minister's visit began soon afterwards and are continuing. On 1 July the following

statement was issued in Peking, Londong and Hong Kong:

4.

"Following the discussions between the leaders of

the two countries in September 1982 and subsequent

useful exchanges, it has been agreed that a second phase of the talks on the future of Hong Kong will begin in Peking on 12 July 1983".

The seventh round of the second phase of talks took place in

CONFIDENTIAL

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