SECRET

(41)

Foreign and Commonwealth Office

LiKKotoli

RECEIVED IN REGISTAY

20 MAN 1984

Dear John

M

(19)

BEGISTRY

Action Taken

Masti

Hong Kong

London SW1A 2AH

18 January 1984

Thank you for your letter of 11 January.

As Roger

said in his letter of 9 January, we do not believe that the "promise" given by the new Chinese Government in the common programme of September 1949 to "encourage the active operation of all private economic enterprises beneficial to the national welfare and to the people's livelihood" can reasonably be compared with current Chinese proposals for making Hong Kong a Special Administrative Region with a high degree of autonomy, as part of the negotiation with us.

The Communists did not negotiate their takeover with Shanghai. Their armed forces occupied it on 24 May 1949, following its evacuation by the Nationalist garrison.

They did not give any undertakings or guarantees for their future conduct that related specifically to Shanghai.

During the latter half of the 1940s, the Nationalists and the Communists did conduct inconclusive negotiations on several occasions. The Communists were at first conciliatory but, as it became clear that they were winning the Civil War, their stand hardened. Their last set of proposals, put forward in a draft 'Agreement on Interim Peace' were initially accepted by Nationalist negotiators in Peking in April 1949, but were subsequently rejected by the Government. Many of the points in the 'Agreement' were incorporated in the Common Programme adopted by the communist-dominated Chinese People's Political Consultative Conference (CPPCC) in September 1949. The CPPCC was attended by representatives from various

'democratic' parties but not the Nationalists.

The Common Programme was the Communists' most authoritative public statement of the policies to be pursued after their victory in the Civil War, and it served as the national Constitution until replaced by a more formal document in 1954. There is little in the April 1949 Draft Agreement or the Common Programme that is analogous to the Chinese proposals for Hong Kong. However, an annex, which attempts to compare these two documents with China's present '12-point plan' for Hong Kong, is attached.

A J Coles Esq

10 Downing Street

SECRET

See 42

/Although

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