7386 D073815 140M 5/74 Cr.P.C. Gp.839/3
Do7381
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British interest in Hong Kong; and Hong Kong's external relations, internal policies and relations with the United Kingdom. The main conclusions are:
(a) that there is little or nothing that can be done to determine Hong Kong's long term future until the next generation of Chinese leaders have emerged and their policies been established but meanwhile HMG should avoid any action that may cause China to make difficulties for the Colony;
(b)
that meanwhile we shall need to plan a strategy of social and institutional reform in consultation with the #ong Kong Government for implementation by 1981/82; and
(c) that great care will need to be exercised both by Hong Kong and HMG to preserve the link between them.
The British interest
3. The paper is based on the presupposition that the British interest requires the continuance of the status quo for the foreseeable, but not necessarily indefinite, future.
4.
There are undeniable disadvantages in the present connection. Politically it is embarrassing for HMG
to be answerable to Parliament for the internal policies of another Government which must act in a cultural, racial and economic environment very different from our own. There are constitutional powers for Parliament to legislate for the Colony; but equally there are practical and political limitations to these powers and no Government has since the war exercised them. Influence on the Colony's internal policies has been indirect and there has inevitably been local resistance to it. There is also bound to be friction with a Colony with substantial interests of its own not necessarily compatible with those of HMG. Recent and current examples of such friction are the Defence Costs negotiations, the problems over textiles and the
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