CONFIDENTIAL

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VISIT BY THE SWEDISH FOREIGN MINISTER: 1 DECEMBER 1983

FUTURE OF HONG KONG

POINTS TO MAKE (Defensive)

1.

Talks agreed September 1982. Meetings held in Peking. Common aim of maintaining Hong Kong's stability and prosperity

2.

Second, more detailed phase of talks began in July. Six rounds since. Latest round 14/15 November. Described by both sides as useful and constructive. Next round 7/8 December.

3. Content of talks confidential.

4.

Objective of HMG is to seek a settlement acceptable to Britain, China and people of Hong Kong. Joint Sino-British aim gives ground for confidence that such an arrangement can be worked out. Views of Hong Kong people being taken "fully into account.

5.

British Government obtains no revenue from Hong Kong other than that of normal trading partner, contrary to what Chinese seem to think. Nor does Britain have colonialist aspirations. Aim is to seek best possible deal for Hong Kong people.

6. Chinese propoganda has floated idea of Hong Kong as Special Administrative Region (SAR) under Chinese constitution with considerable autonomy and functioning essentially as it does now. Most people in Hong Kong sceptical of this idea, which suggests basis for confidence not grasped by the Chinese. Hong Kong people and investors need effective guarantees.

7.

Important nothing said or done which might damage confidence in

CONFIDENTIAL

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