SECRET

FUTURE OF HONG KONG : BRIEFING OPPOSITION LEADERS :

POINTS TO MAKE

[WITH DR OWEN/MR STEEL ONLY]

Francis Pym briefed you in May.

Updating useful.

[WITH ALL]

1.

Confidentiality.

2. Prime Minister's China Visit September 1982. Talks agreed.

Common aim. HMG's aim.

3. Talks. Initially slow. Chinese insistence on prior recognition

of their sovereignty premise.

4.

Persuaded Chinese to enter more concrete talks in July.

Conceded nothing. Stressed need for arrangements after 1997, acceptable to Parliament, China and Hong Kong. Only then could

recommendations on sovereignty be put to Parliament.

"

5. Second phase of talks. Began July. Seven meetings so far.

Next 25/26 January.

6.

Delegations.

Governor of Hong Kong participating on British

side.

"

7.

Atmosphere 'friendly.

Chinese tough on substance. Demand

sovereignty. Say sovereignty/administration indivisible.

SAR plan for Hong Kong. Key elements.

8.

Reiterate

SAR plan. Details incomplete. Hong Kong people sceptical.

July/September Rounds. We attempted to educate Chinese on Hong

Kong's complexities. Chinese suspicious.

9.

10. October Round. We proposed, without prejudice to discuss

measures to ensure stability/prosperity on basis of Chinese

proposals. Well-received.

SECRET

/11.

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