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-9 AUG 1985

DEM To

0/37

REGISTRY

CONFIDENTIAL

FROM:

INDEX

PA

Action Taken

dh

Reference.....

3 C halter Asian kerion

078 2/135 273 3562

DATE: 6 August 1985

CC (without enc):

Mr Galsworthy, HFD Mr Orr, FED

Xx hall

Dr Hoare o.r

BONG KONG: A CHANGE OF DESTINY

1. I think you will wish to see the Governor's despatch of 3 July, together with Mr Galsworthy's submission of 1 August covering the despatch (both attached).

2. In the course of his summary of the negotiations, Sir E Youde pays tribute (in paragraph 16) to the Unofficials and others who stood up for Hong Kong's interests against signs of Chinese displeasure. He also notes (in paragraphs 23

and 28) that the Chinese were wise enough not to challenge the Hong Kong Government's proposals for constitutional development and the procedure for assessing the acceptability of the Agreement to the people of Hong Kong. More generally, it might be observed that, within the context of their understandably nationalist perception of the issues, the Chinese under Deng deserve credit for a as well as for their

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3. In the final part of the despatch (paragraphs 29-37) Sir E Youde outlines five essential elements for the period leading up to 1997. There is perhaps some room for debate about the second of these, ie the Governor's view (in paragraph 33) that for the sake of confidence there must be no encroachment by the Chinese on the administration of Hong Kong before the 1997 hand-over. Later on (paragraph 36), the Governor notes that transitional arrangements will need to complete well before 1997 in order to reduce the impact of that date. It could be argued that for the same reason some degree of Chinese involvement (rather than interference) in the administration of Hong Kong before 1997 would be desirable in order to demonstrate that the post-1997 arrangement is workable and to educate the Chinese in the necessity of abstaining from interference.

4. Mr Galsworthy adds six important comments in paragraph 5 of his submission. I would only add that from the British point of view an additional objective will be to minimise costs to this country's interests arising from the transition in Hong Kong.

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Marfalla

CODE 18-77

AWO Ltd. 7/84

Kenneth C Walker

CONFIDENTIAL

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