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CONFIDENTIAL

BRITISH EMBASSY,

HUK040/58 PEKING.

RECEIVED IN REGISTRY

1 9 NOV 1984

THE FUTURE OF HONG KONG,

SUMMARY

DESK OFFICER

INDEX

PA

о

REGISTRY

Action Taken

1. The despatch reviews and comments on the process of discussion and negotiation which led to the initialling of

1984 the Joint Declaration on 26 September assesses the outcome;

and looks into the future. (Paragraphs 1 and 2)

2. The process of discussion and negotiation.

(Paragraphs 3 to 12)

3.

Four phases.

Negotiating strategy. Our objective: to find means of assuring Hong Kong's future stability and prosperity. China's

objectives: to recover Hong Kong and resume the exercise of

sovereignty over it no later than 1997; on this premise, to

preserve Hong Kong's stability and prosperity. (Paragraphs 13-16)

4.

Shape of the negotiation. Political factors: attitude

of the Chinese towards the participation of Hong Kong; Chinese suspicion of our motives; Chinese concern with appearances; Chinese disinclination to include detail in the agreement. Need to conduct a high speed three-cornered dialogue among London, Hong Kong and Peking. Formality of the formal rounds; informality of the work of the Working Group and Ad Hoc Group. (Paragraphs 17 23)

5. The achievement. The agreement is better and more detailed

than many had expected. Only real disappointments are on nationality and defence, and on the vagueness of some provisions

on government structures. A preemptive concession of sovereignty

in 1997, which some have argued might have enabled us to retain British administration, was politically never an open option.

(Paragraphs 24

-

25).

6. The future. China's interests likely to militate in favour of her honouring the agreement (Taiwan; the advantages of a

prosperous Hong Kong for China's development; China's inter- national reputation). The 13 years between now and 1997 will

not be easy.

But China needs our cooperation. We should give it. We should be firm but also cooperative on Hong Kong's

/ constitutional

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