SECRET
continue to be internationally tradable, this will just happen.
Hong Kong people and investors need proof of effective guarantees
against Chinese interference.
7. Evidence suggests Chinese do not fully understand how Hong Kong
works. We have sought to educate them about complexities of its systems and basis for confidence, particularly in the Hong Kong dollar. We see link to Britain and systems prevailing as providing
best guarantee.
8. Central issue is to devise package in which Hong Kong people
will have confidence. Must therefore agree arrangements which will
reassure them. Given joint Sino-British aim, confident such an
arrangement can be worked out.
9. British Government obtains no revenue from Hong Kong other than
that of normal trading partner, contrary to what Chinese seem to
think.
10.
Important nothing said or done to damage confidence in Hong
Kong. Grateful for your understanding.
Sovereignty
11. Chinese and British positions well-known. We fully realise importance of sovereignty issue to China. We are not inflexible. Are willing to consider any solution to Hong Kong's future
acceptable to Britain, China and Hong Kong.
SPODER.