CONFIDENTIAI.
South are pioneering the South China economic miracle. China's economic prosperity can only be assured on the same assumptions (about continuing economic reform, opening to the West, full respect for the Joint Declaration) which are essential to Hong Kong's own survival and prosperity.
3. We have to recognise that the Chinese will always place political stability (in Hong Kong as at home) as the
But we need to essential pre-condition of economic reform.
in a stable and prosperous play hard on their own interests - South China, in a smooth and creditable transition and in avoiding landing the SARG with an awkward economic mess in 1997 to ensure that they face up to the economic realities, that they talk intensively to HMG/HKG behind the scenes rather than through the press and that they woo rather than intimidate their future citizens.
4. That one has to say all this is not for want of trying to create a sensible dialogue with Peking. The HKG find it intensely frustrating that the Chinese are so slow and suspicious, that offers of briefings are taken up so grudgingly and that the Chinese find it so hard to understand that more cooperative dealings with HKG would greatly help us achieve a political dispensation in Hong Kong that best matches the aspirations of their Basic Law.
5. I have touched separately on the problems of handling LegCo and the 1995 elections. I was struck by how worried people were by the lack of morale in ExCo - fostered by confusion about Chinese real objectives and frustra¢tion that Peking's approval is needed for more and more decisions. EXCO is at present very dependent upon a few members upon whom the government has to rely to rally support in LegCo. If this liaison strategy falters then it may be sensible to look again at the composition of ExCo in its final British years.
us.
6. Much however will depend on whether political changes in China will bring forward leaders there with a better grasp of the modern world and greater recognition of Hong Kong's value to China and greater willingness to talk issues through with
Even quite small changes could have a big, positive impact in Hong Kong and help to lay the ghost of Tienanmen Square. The departure of Li Peng would make it possible for HMG and other Western governments to reopen an unqualified dialogue with Peking. Chinese political priorities will remain the same, but it may then be possible to remove at least some of the suspicion between us so that the politics of struggle may be moderated by a desire to cooperate with us in the final rush to the 1997 fence.
7. Meanwhile it will be important for the next British Government to take care in setting out to the Chinese
EM8AAD
CONFIDENTIAL