SECRET FM FCO

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- 3 NOV 1993

INDE.

TO PRIORITY PEKING

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Internet support & file, Mr Gee dits to o

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MDLOAN 3534

M Richter

Sandin in Worshow 24/10 Ms B-J or

INFO PRIORITY HONG KONG, UKREP JLG HONG KONG, TOKYO INFO PRIORITY WASHINGTON, PARIS, BONN

1/LIKAJ.

MIPT: INFORMAL TALKS ON CHINA: HONG KONG

PERSONAL FOR HEADS OF MISSION

HONG KONG PERSONAL FOR POLITICAL ADVISER

the

Asia directions of Ukus France Japan & Gesherry. 1. At the informal talks on China held at Chevening on 18 October, Hum briefed partners on our negotiations with the Chinese over Hong Kong. After briefly reviewing the background to the talks, he said that they had made very little progress. The UK was now very close to its bottom line. The Chinese were being rigid for various reasons probably including the present jockeying for position among the leadership. It looked probable that the talks would not succeed. In that case we would have to put proposals to Legco before the end of 1993. It was not clear exactly how Hong Kong opinion would react to that situation, though there was an encouraging degree of public support for the Governor and for the course we were pursuing, and business confidence seemed less volatile than in the past. But the matter would require careful handling in Hong Kong, and it would in the Last analysis be for Legco to decide. The Chinese reaction was bound to be hostile although their economic interests in Hong Kong were continuing to increase.

2. There was legitimate international interest in Hong Kong's continued prosperity and in implementation of the Joint Declaration as an international agreement. We were grateful for the support which partners had given us. We had never asked for support for our detailed negotiating position, but it was helpful if partners made it clear to the Chinese that they had their own interests in Hong Kong. Hum mentioned specifically the action taken in public by President Clinton and in private by the Japanese. If the talks did break down, officials here might recommend to our Ministers that they send messages to partners expressing our willingness to resume talks with the Chinese and asking partners to express their support for our objectives.

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