CONFIDENTIAL
047270
MDHOAN 0808
The Prime Minister held a stock-taking meeting on 10 November with Ministerial colleagues and the Governor. They concluded that we should now move on to a more intensive phase of
have passed a high level message to the effect. We have told them that we want to
interim agreement very quickly and hope main subject of the next round of talks
negotiations, and we Chinese side to this pursue the idea of an that this will be the which are on 19 and 20
November.
The next few weeks will therefore be crucial. Unless we are able to reach at least an interim agreement in that time, it will be necessary for practical reasons to introduce legislation on the more urgent issues. It would therefore be very helpful if President Clinton/Mr Hosokawa were to touch on the Hong Kong issue in their meetings with President Jiang Zemin in Seattle. In particular, it would be most useful if the President/Prime Minister were able to make clear from the perspective of one of Hong Kong's closest economic partners that there are a number of features of Hong Kong that will need to be preserved if the territory is to go on attracting international business and investment, and thereby fuelling growth throughout Southern China. The points might be made on the following lines:
The US/Japan has long standing trade and investment ties with Hong Kong, and therefore has a close interest in Hong Kong's economic success before and after 1997;
Hong Kong's political, economic and Legal systems have all been crucial to what it has achieved so far. It is a matter of concern to all Hong Kong's partners that confidence in the 'one country, two systems'' approach should not be shaken and that the Chinese authorities should show by their actions that they are serious about preserving Hong Kong as a successful economic centre in a region of growing importance;
- The US/Japan have been following the talks between China and Britain closely. These are of course a bilateral matter between the two countries. But all those who trade with and invest in Hong Kong want to see an early and successful conclusion which will remove the present uncertainty and enhance confidence in a smooth and cooperative transfer of power between Britain and China.
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