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guarantee against interference by Peking.

6.

Chinese have floated idea of autonomous Hong Kong.

Special Administrative Region of China, linked to Peking but

with assurances of non-interference after 1997. Hong Kong people

very sceptical of value of these assurances.

7.

Many important practical aspects. Problem of maintaining

Freedom of press.

credible independent currency. Legal system.

8.

No advantage in overt propaganda confrontation with

Chinese. We are concentrating on making progress in the talks.

Maintaining close contact with Hong Kong Executive

9.

W

Council (EXCO). Essential to maintain their confidence.

Governor and EXCO Unofficials had talks in London with Ministers

in early July.

10.

Important to work together in maintaining confidence in

Hong Kong. In view of delicacy of negotiations, grateful for

help in moderating public and parliamentary interest at present.

Hong Kong Department

25 August 1983

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