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15.
The
But
As regards Hong Kong, the implementation of the Joint Declaration went forward in 1986 largely as we would have wished. Hong Kong became a separate contracting party of the GATT. Chinese agreed, after much argument, to the introduction in 1987 of a new form of passport for British Dependent Territory Citizens in Hong Kong which would remain valid after 1997 and to the negotiation by Hong Kong of separate Air Service Agreements. 1987 is likely to be a difficult year. It will be necessary to relate the review of representative government which is to take place in Hong Kong to the Chinese process of drafting the Basic Law for the Hong Kong Special Administrative Region in such a way that two contrary dangers are avoided: serious damage to confidence in Hong Kong through any appearance of yielding to Chinese pressure
and confrontation between the British and Chinese Governments on
constitutional issues. Much patience and resource will be needed.
16. As regards the second interest, I do not believe that a relationship between China and the Soviet Union of the kind which
existed during the 1950s will ever be re-established. I do think,
however, that political relations between the two countries could become significantly closer if the most powerful man in China after
the death of Deng were to be someone less strongly anti-Soviet than he is. There is probably not very much which we can do to influence the way in which things develop. But I do hope that the Chinese dimension will be remembered when we make policy on
international issues, such as arms control, in which China has an
interest (my hope applies a fortiori of course to the Americans).
17. As regards trade, the outturn for 1986 was good. At about £500 million (a figure which excludes re-exports from Hong Kong), British exports will be worth 25% more than they were in 1985 during a year when the total value of Chinese imports declined a little. China is becoming a sizeable British market, though it ought to be bigger still (our market share is still barely 2%).
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