L.morris. 16
CODE 18-77
CONFIDENTIAL
Reference
2
Governor believes that it would have been wrong to enter negotiations with China without letting Hong Kong people know his basis for those discussions. But these proposals are just that: proposals for discussion, and the Governor would be happy to discuss any alternative proposals China may have for the elections in 1995 which would be open, fair and acceptable to the people of Hong Kong.
As you may be aware, the 25th meeting of the Sino-British Joint Liaison Group took place recently in Hong Kong. Despite our best attempts to encourage them, the Chinese side refused either to discuss our proposals for the 1995 elections, or to transact any substantive business on outstanding issues on the JLG agenda. We explained to them that it is not good enough for China to insist that the Governor must withdraw his proposals before they will deign to talk with us. Britain and China are equal signatories to the Joint Declaration and it is inappropriate for one side to seek to dictate the terms of any discussion.
But China remains implacable and, as you will be aware, they have made a number of inflammatory public statements recently, designed to damage business confidence in Hong Kong. We also know that they have been seeking to intimidate Hong Kong and foreign firms, by suggesting that those who support the Governor's proposals may expect to suffer commercially after 1997. This is dangerous and irresponsible behaviour, and does not sit comfortably with China's commitment under the Joint Declaration to preserve Hong Kong's stability and prosperity.
It is clearly important that China and Britain should return to rational, calm discussion as quickly as possible. We should be grateful if Japan could explain frankly to China that Chinese attacks on business confidence in Hong Kong run the serious, long-term risk of undermining international confidence in the one country two systems policy. In particular, it would be helpful to make the following points:
a) gradual political change in Hong Kong is necessary if political disruption is to be avoided;
b) prosperous well educated people understandably want a greater share in running their own affairs, and;
c) Hong Kong works so well not only because of its capitalist economic model, but because the market economy operates within the framework of a tolerant society and the rule of law;
d) if the international community begin to think that Hong Kong's law and order or public administration are under threat, they will soon move their money elsewhere.
ENDS
Jhonis
J C Morris
CONFIDENTIAL