SECRETARY OF STATE'S LUNCH WITH LORD SHAWCROSS OF THE
MORGAN GUARANTY TRUST COMPANY OF NEW YORK: 17 DECEMBER
NOTES
1.
Thank you for letter of 8 December. Interested to hear
impressions on Hong Kong. Noted your helpful comments in your
interviews there.
2.
Agreement to hold talks with common aim of maintaining
stability and prosperity was a considerable achievement. Meetings
to follow up Prime Minister's visit have begun. Complex issues.
But we believe a satisfactory outcome can be reached. Solution
must be acceptable to people of Hong Kong and to Parliament.
Talks must be confidential. Wrong to negotiate through
3.
the media.
Outcome should not be prejudged by what is said
outside the talks.
4.
Not sure the Chinese understand that confidence in Hong
Kong is linked to British administration and existing systems,
eg legal, financial, commercial, etc. Need to get this message
across. Grateful for any ideas, Perhaps you could help when
you go to Peking.
5.
Understand current concern in Hong Kong, Lord Belstead
has just paid very useful visit (6-10 December).
Valuable exchange
of views on the future. Important that Hong Kong people make their
views known to the Chinese.
6.
Hong Kong Stock Market and dollar exchange rate have been
affected.
Several factors responsible including world recession,
reduced growth forecasts, declining property prices, high interest
rates, etc.
7.
Glad to have another chat before you go to Peking. Please
get in touch.