SECRET
FM HONG KONG
TO DESKBY 21140OZ FCO
TELNO 660
OF 2112052 FEBRUARY 90
SECRET
020/13
HKB ¿CEIVED IN REGISTRY
27 FEB 1990
DESK OFFICENT
REGISTRY
INDEX
Action Takön
INFO IMMEDIATE PEKING, BUDAPEST, UKREP JLG HONG KONG
165705 MDHIAN 7922
8
PERSONAL FOR MARSDEN, HKD, FROM GOVERNOR
YOUR TELNO 395: AND PEKING TELNO 281 : HUNGARY/HONG KONG
1. WE NEED TO STRIKE A CAREFUL BALANCE BETWEEN CHINESE SENSITIVITIES AND SECURITY CONSIDERATIONS ON THE ONE HAND, AND TRADE ADVANTAGE ON THE OTHER.
2. ON THE FIRST, THE CHINESE CLEARLY REMAIN SENSITIVE TO THE CHANGES IN EASTERN EUROPE TAKING PLACE AT PRESENT. THESE SENSITIVITIES MAY DIMINISH IN TIME, BUT THE OTHER ADVANTAGES WOULD HAVE TO BE CONSIDERABLE IF WE WERE TO DEPART STRAIGHT AWAY FROM OUR LONG-STANDING PRACTICE NOT TO AGREE TO ANY PERMANENT EASTERN BLOC PRESENCE IN HONG KONG.
3.
4. ON THE POSSIBLE ECONOMIC ADVANTAGES, IN 1989, HUNGARY ACCOUNTED FOR 0.02 PERCENT OF OUR WORLD-WIDE TRADE CRANKING 67TH IN OUR LEAGUE OF TRADE PARTNERS). TRADE WITH THE GDR WAS THREE TIMES AS GREAT ANDS WITH POLAND THREE AND A HALF TIMES AS GREAT. IN OTHER WORDS HUNGARY'S TRADE WITH US IS INSIGNIFICANT. ARGUABLY IT MIGHT RISE AS HUNGARY LIBERALISES ITS SYSTEM AND IF WE WENT OUT OF OUR WAY TO FACILITATE IT. BUT BY HOW MUCH?
5. WE WOULD ALSO HAVE TO CONSIDER THE KNOCK-ON EFFECT OF ALLOWING A HUNGARIAN OFFICE. WHERE, IF ANYWHERE, WOULD WE DRAW A NEW LINE? IF
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