SECRET

7.

Apparent that any collapse of Hong Kong economy through loss of confidence this would reflect badly on Britain and China and

affect their international standing in wider issues. Conversely any

solution leaving Hong Kong flourishing would have favourable

spin-off.

8. Present system in Hong Kong effective. This has attracted and

fostered domestic and international confidence.

9. Britain obtains no revenues from Hong Kong other than those of

a normal trading partner. British Government therefore has no motive in talks other than to preserve for Hong Kong its currently successful and prosperous society.

Hong Kong Department

10 August 1983

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