CONFIDENTIAL
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FROM: R A Burns
DATE: 8 April 1992
CC:
Upps
PS/Minister of State PS/PUS
Sir J Coles
Mr Appleyard
Mr Crowe
Mr Broadbent
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Mr Cox, HKD
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Mr Ricketts, HKD
HONG KONG: MANAGING THE CHINESE
1. During my visit to Hong Kong last week with Mr Broadbent and Mr Cox, various useful points were made to us about ways of managing the Chinese.
2. We were impressed by the sense that pre-1997 difficulties in Hong Kong are increasingly becoming a Chinese problem at least as much as a Hong Kong one; and that while the Chinese are only slowly coming to recognise this, we should not think ourselves into the position of being demandeurs. Our broad conclusion was that we must, as a matter of urgency, find ways of spelling out convincingly to the Chinese the following central points; that it is in the Chinese interest:
a) to bolster the authority of the Hong Kong Government rather than to diminish it through endless nagging criticism and obstructionism. The next five years will be ones of considerable political tension and apprehension. If the Chinese want the best possible convergence with the Basic Law by 1997 then they must help the British and Hong Kong Governments to respond to the political pressures in a way that best ensures a through-train. As from 1 July 1997 they will have the sovereign power and the whole world will be watching how they use it.
b) to support the HKG in its financial management so that the society that they inherit in 1997 will be a thriving one economically with business, banking and investor confidence high, strong reserves, lower inflation and low taxation. In particular they must resist the temptation to criticise or obstruct the financial arrangements for the airport. These are essential if the money is to be found to allow the airport core programme, including the railway, to be completed by 1997 as the Chinese wish.
c) to encourage Hong Kong's economic and financial interest in South China. It is Hong Kong's business and banks which
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CONFIDENTIAL