2
SECRET
Mr Morris
Mr Clift
1.
A
10
Reference... Hkk 040/9..
HKK 040/9
RECEIVED SA REGISTRY NO. 51
13 MAY 1983
DESK OFFICES
INDEX
No
AEGISTRY
Action Taken
CM 418
REVISION OF THE ANNEXES TO THE HONG KONG STUDY
It was agreed at Mr Clift's meeting, held to discuss his minute of 25 April, that what we must do is to identify a few key questions on the subject matter of each of the Annexes put to other Departments. The questions should be those answers to which will enable us to prepare a negotiating position. understand it, our ideal position would be to achieve maintenance of the status quo, even if Hong Kong became a Special Administrative Region of China.
2.
As I
For Annexes M and N, I set out below a list of questions designed to help support our ideal position and also to establish where our fall back position might be. I also attempt to identify what a possible Chinese position might be and how we might counter it.
Annex M : External Trade
(1)
(2)
(3)
If China's, rather than the UK's and Hong Kong's own, external trade agreements were to apply to Hong Kong, what would be the loss to Hong Kong's revenue from external trade? And how would this affect the Hong Kong economy and how quickly?
What indications are there that other countries would be prepared to extend existing trade agreements to Hong Kong as a Special Administrative Region administered by the Chinese; notably Japan, the USA and the EC, given existing restraints on imports from China? Would they be unwilling to consider having in effect two sets of trade agreements with China?
How far would the UK's trade with Hong Kong (1982 exports worth about £650 million) suffer if Hong Kong fell under China's external trade agreements? And how far would the trade of other countries, notably Japan and the USA, suffer?
The Chinee might argue that their own trade agreements will be more flexible by 1997. They might also insist that Hong Kong's case would be different without being specific as to how.
4.
We would need, by use of the answers to the above questions, to pin them down to agreeing to permit Hong Kong's current trade practices to continue.
}
3.
CODE 18-77
SS 8/78
SECRET
10