SECRET DE DIP

4886 - 1

FROM THE CIVIL WAR) AND HONG KONG AS A PROBLEM OF FOREIGN

DOMINATION ON CHINESE SOIL. IF WAS NOT AN EASY POINT TO GET

ACROSS TO THE CHINESE ALTHOUGH IF THERE WERE A SUCCESSFUL SOLUTION OVER HONG KONG WHICH GAVE CONFIDENCE TO THE PEOPLE THERE,

IT MIGHT MAKE IT EASIER FOR THE CHINESE TO SECURE A SETTLEMENT

WITH TAIWAN.

9. WOLFOWITZ ASKED IF THERE WAS ANYTHING MORE THAT HMG WISHED THE UNITED STATES TO DO. DONALD SAID THAT AT PRESENT WE SIMPLY

WISHED TO KEEP OUR AMERICAN FRIENDS INFORMED. HOWEVER, MUCH FURTHER DOWN THE LINE A POINT MIGHT COME WHERE THE UNITED STATES

COULD BE HELPFUL IN EXPLAINING AN AGREED SOLUTION TO AMERICAN

INVESTORS OR IN REINFORCING TO THE CHINESE THE IMPORTANCE OF

MAKING A SETTLEMENT STICK. OUR THOUGHTS ON THIS WERE TENTATIVE

AND HE THOUGHT IT WAS PREMATURE TO SAY MORE AT PRESENT.

10.

WOLFOWITZ SAID THE US WAS DOING A REVIEW OF ITS INTERESTS IN HONG KONG AS PART OF THE BACKGROUND FOR THE PRESIDENT'S VISIT TO

CHINA. THE PURPOSE WAS SIMPLY TO SEE WHERE THE US HANDLING OF ITS RELATIONS WITH CHINA, FOR EXAMPLE ON TEXTILE MATTERS, MIGHT HAVE AN IMPACT ON OUR OWN NEGOTIATIONS WITH THE CHINESE. IT WAS NOT THAT THE AMERICANS THOUGHT THEY HAD MUCH SCOPE TO PLAY A MORE ACTIVE ROLE, AND IN THE EVENT THAT KNOWLDDGE OF THIS REVIEW BECAME PUBLIC, HE WOULD NOT WISH US TO BE ALARMED.

11.

THE AMERICANS EXPRESSED GRATITUDEFFOR THE BRIEFING AND AGREED

TO MAINTAIN CONFIDENTIALITY.

12. YOU AND HONG KONG WILL WISH TO KEEP YOUR LOCAL AMRICAN

CONTACTS INFORMED.

HOWE

FUTURE OF HONG KONG

LIMINMED

SD/SKO

ED/5

COPIES TO: (VIA DISTR. ROOM)

BUCKINGHAM PALACE

PS/LORD PRESIDENT OF THE COUNCIL

PS/HOME SECRETARY

PS/CHANCELLOR OF THE EXCHEQUER

PS/LORD PRIVY SEAL

PS/SECRETARY FOR TRADE AND

HD/PLANNING STAFF

HD/PUSD

D/HD/PUSD(MR FLOWER)

RESEARCH DEPT(MR WALKER)

LEGAL ADVISER(SIR IAN SINCLAIR)

PS

PS/LADY YOUNG

PSAR LUCE

PS/PUS

SIR J BULLARD

MR GIFFARD

MR DONALD

MR WRIGHT

SIR C TICKELL

SECRET

INDUSTRY

COPIES TO:

(VIA ADR)

MR ROBERTS

NEWS DEPT

MR BURROWS LEGAL ADVISERS MR COLES NO 10 DOWNING ST SIR A PARSONS

MR MARTIN

#t

1

ASSESSMENT STAFF

CABINET OFFICE

MR GOODALL CABINET OFFICE MR BRENNAN

PS/S OF S FOR DEFENCE PS/ATTORNEY GENERAL

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