SECRET
FM FCO
TO IMMEDIATE HONG KONG
TELNO 495
OF 16093OZ MARCH 92
SECRET
MARTS. 101/2
175517
MDHOAN 1471
ли
PERSONAL FOR GOVERNOR FROM SIR JOHN COLES
✓ personal-not entered)
YOUR TELNO 761: UK/HONG KONG RELATIONS
AS
1 I SHALL BE GLAD TO DISCUSS THIS QUESTION WITH YOU. AN AID TO OUR DISCUSSION I SET OUT SOME FIRST REACTIONS BELOW WHICH FOLLOW CONVERSATIONS WITH ANDREW BURNS, PETER RICKETTS AND SIMON BROADBENT
2. I AGREE THAT THE IMPORTANCE OF MAINTAINING THE OVERALL AUTONOMY OF HONG KONG IN FINANCIAL AND ECONOMIC MATTERS IS LONG ESTABLISHED. I DO NOT THINK ANYONE AT THIS END (INCLUDING THE TREASURY) DOUBTS THAT IT IS IMPORTANT TO PRESERVE THIS AUTONOMY AND INDEED TO STRENGTHEN IT WHEREVER POSSIBLE, SO THAT ALL THOSE SECTIONS IN THE JOINT DECLARATION WHICH DEAL WITH CONTINUING AUTONOMY IN VARIOUS FIELDS HAVE THE BEST POSSIBLE CHANCE OF WORKING OUT IN PRACTICE. THERE IS NO ATTEMPT TO CHANGE POLICY.
3. AS YOU SAY, BECAUSE OF CHINESE INVOLVEMENT IN MATTERS LIKE THE AIRPORT, HMG HAS BEEN OBLIGED TO SHOW A GREATER INTEREST IN ASPECTS OF THE HONG KONG ECONOMY. I AGREE THAT WE SHOULD PURSUE THAT INTEREST IN A WAY WHICH DOES NOT COMPROMISE THE AUTONOMY OF HONG KONG IN THE FUTURE.
4. THERE ARE PERHAPS TWO BROAD AREAS WHERE AT PRESENT WE BELIEVE WE HAVE TO PURSUE THAT INTEREST. FIRST SOME ASPECTS OF HONG KONG'S ECONOMIC AND FINANCIAL POLICY-MAKING DIRECTLY ENGAGE OR COULD ENGAGE THE BRITISH NATIONAL INTEREST NOT SIMPLY IN POLITICAL TERMS BUT IN TERMS OF HARD CASH. THERE ARE THREE CURRENT EXAMPLES OF THIS:
A) A CERTAIN BANKING MATTER, WHICH WE ARE DISCUSSING SEPARATELY.
B) EXPORT CREDIT, WHERE HMG IS BEING ASKED TO PROVIDE COVER IN EXCESS OF WHAT IS FINANCIALLY PRUDENT IN GLOBAL TERMS, NOT SIMPLY TO BOLSTER THE PROSPECTS OF BRITISH BUSINESS BUT TO DEMONSTRATE TO THE INTERNATIONAL FINANCIAL COMMUNITY AS A WHOLE
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