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FUCK Note of
Notel of a conversation
STR
6 NOV5 Sir Peter Blaker and I had an interesting
conversation with XU Jiatun at dinner last night. I asked XU what factors he thought were behind the poor performance of, domestic investment in manufacturing Industry in Hong Kong. He said people were taking a "wait and see" attitude: they were worried by two things, the possibility of change in China, and the prospect of political reform in Hong Kong.
2.
Sir Peter mentioned his conversation with ZHOU Nan on the latter subject. ZHOU had counselled caution and had said that Britain should discuss any proposed constitutional changes in Hong Kong with China. Sir Peter agreed with this view. MP's at Westminster generally understood the need for caution, and not to upset the stability and prosperity. China should not be misled by the views of a vocal minority at Westminster.
3.
I asked Sir Peter (for Mr XU's benefit) how he thought Westminster would react if there were a widespread call in Hong Kong for direct elections. Sir Peter said Wesminster would have to take it seriously. But he agreed that there should be discussion with China. Since ZHOU Nan had spoken of discussing change with China, he inferred that China was not necessarily against change.
4.
XU then embarked on a lengthy explanation of his understanding of what ZHOU Nan had meant. He said that ZHOU was speaking on a personal basis but that the British Government would do well to take note of what he said. The Joint Declaration had referred to the preservation of
CONFIDENTIAL
/Hong Kong