CODE 18-77

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Mr Runacres

RECE

1 4 MAY 1993

FRANCE/TAIWAN/HONG KONG

1.

Reference

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Kyffetts Mr Bunter 483

Mussanesi 5 Banes Jers BitS

? probably me (GM)

J Powell Esq, HKD, FCO Ms J Painting, FED, FCO

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I saw Gérard Le Corre on 6 May for lunch, I have reported developments in France's Taiwan policy and Le Corre's comments on this separately by teleletter. The remaining issues of interest were the following.

Hong Kong

2. I briefed Le Corre in very general terms on the recent negotiations in Peking, accentuating the positive. He said that the reports they had received from their mission in Peking were rather more downbeat. Following the briefing given to partners on Hong Kong at the Asia Working Group, Le Corre asked if UK policy on asking for overt public support had changed. I have not seen a report of the briefing given, but told Le Corre that to my knowledge we were sticking to our previous position i.e. that we were very grateful for support to be expressed to the Chinese in bilateral contacts, but that public statements would be

counterproductive.

3.

Le Corre's analysis of the prospects for the negotiations was pessimistic; he concentrated particularly on the Chinese talent for foot-dragging in negotiations and asked about the July deadline for putting the proposals to Legco. I said that we would obviously try and be flexible in order to sort out any remaining practical arrangements, but not at any price. Le Corre went on to speculate that as China renewed its economic ties with other countries in the region (Taiwan, Singapore) and coupled with her own remarkable growth rate, Hong Kong was losing its importance to China and so international pressure would have less effect. He mentioned the very strong disapproval of the Governor's proposals expressed to the French by the Hong Kon business community.

4.

Le Corre said that Longuet (External Commerce Minister) will visit Hong Kong at the end of May (although not official yet). He was hoping to see the Governor and trade officials. This will be one of the first ministerial overseas trips of the new government and will be a welcome sign of French confidence in Hong Kong. Longuet's visit will round off the mainly cultural festival which the French consulate are running during May (the centrepiece of

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