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THIS IS A COPY

THE ORIGINAL HAS BEEN CLOSED FOR

40 YEARS UNDER FOI EXEMPTION NO. 2700....

SIR P CRADOCK'S VISIT TO WASHINGTON DC: HONG KONG

Future of Hong Kong

1.

Kong.

Coming 12 years will be a trying time for Hong

HMG will have to perform delicate political

balancing act. Need the cooperation of the Chinese, but must also be seen in Hong Kong as prepared to stand up for Hong Kong's interests.

2.

Will need

need full support of our allies during this

period. Particularly the Americans. In quibbles about aspects must not forget larger

Aware of importance we believe

commercial and other

political picture.

Americans attach to continuing prosperity and stability of

Hong Kong.

Hong Kong Economy and Trade

3.

Has proved buoyant and confident in aftermath of

Agreement. Stock Market index recently at a four year

high.

However, Hong Kong's economic viability remains dependent on trade, and US is Hong Kong's largest market.

are already affecting

confidence in Hong Kong, which, unlike other trading

Protectionist moves

any

in

US

not

partners against whom US measures may be aimed, does

impose

restrictions оп US goods. A local s lump

brought on by cutbacks in Hong Kong's largest market would represent a real threat to Hong Kong's prosperity and stability, and thus to implementation of Agreement.

Joint Liaison Group

4.

First meeting of the Joint Liaison Group London, 22-25 July. Next meeting Peking, 26-29 November. British delegation led by Dr Wilson. Includes 2 members of Hong

Kong Government

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