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IMMEDIATE
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Joint Declaration as the final arbiter in our dealings with
China. But seen from here the whole negotiation over the
Airport MOU has marked a watershed. It is not simply that the
Chinese have been able to argue that we have now moved into a
second qualitatively different phase of the transition. It is
even more relevant that as we come closer to 1997 the political
theory in the Joint Declaration (and perhaps even in the Basic
Law) is coming up against the test of hard reality in the shape
of hard-nosed financiers, bankers and Treasury officials who
want to calculate the exact risks that are being undertaken, and
who are looking for further reassurances about the attitude of
China.
6. We have already had considerable exchanges about how best to
give specific application to the Chinese commitments which we
have already secured. One has only to listen to the MTRC or the
HSBC to realise how pressing it has now become to pin the
Chinese down in a more hard and fast manner to honouring or at
least not disrupting the commitments which are now being entered
into before 1997, and which will straddle that year. I realise
only too well how difficult this is if at the same time we wish
to resist a Chinese veto over decisions taken by HKG before 1997
or any comparable Chinese involvement in the decisions taken by
the SARG after 1997.
7. There is probably not much we can do until we know the result
of the general election here in the UK. If the result is that
the Conservative Government is returned, then the policies that
we have been pursuing and the commitment entered into after the
Airport MOU will probably continue, and we can legitimately
press the Chinese to be more cooperative in the way we have been
doing so far. You will know from talking to Lord Caithness that
our present Ministers are greatly concerned about the
difficulties