SECRET
thought through most detailed issues involved. They seem to assume
that by saying Hong Kong will continue to be financial/ commercial
centre or that currency will continue to be internationally tradable, this will just happen. Hong Kong people and investors need proof of effective guarantees against Chinese interference.
7.
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.
8.
British Government obtains no revenue from Hong Kong, other than that of normal trading partner, contrary to what Chinese seem
to think.
9.
Important that nothing is said or done that might damage confidence in Hong Kong. Grateful for your understanding on this
point.
[ DEFENSIVE]
Sovereignty
10.
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 which will be acceptable to Britain, China and Hong Kong.
Acceptability
11.
We are taking views of the people of Hong Kong fully into
account. Made known to us and the Governor many channels. In this
context, Governor and Unofficial Members of Hong Kong's Executive
Council visited London early July for consultations with Ministers. Mr Luce will visit Hong Kong 24-29 September.
SECRET