I
TOP SECRET
(s)
Our negotiating position is, however, weak in that we have many hostages in the Colony in terms of people and assets and no means of bringing significant pressure to bear on China. The strength of our position will rest on Hong Kong's economic value to China and on our ability to hand it over with that value unimpaired and its trading links with Western countries kept open. To use this card changed attitudes on the part of some Western countries will be a prerequisite.
the
(t) The initiative does not effectively lie in our hands:
Chinese could always frustrate our attempts to negotiate. But on the timing of an approach all the considerations indicate that we should make it as soon as there emerges in China a regime with which we might do business and before the Hong Kong economy starts to run down in the 1980s; we should avoid any time when the Hong Kong economy is showing weakness or we are under Chinese pressure.
H.
RECOMMENDATIONS
(1) We should recognise that Hong Kong's future must eventually
lie in China and that our objective must be to attempt to negotiate its return, at a favourable opportunity, on the best terms obtainable for its people and for our material
interests there.
(2)
Withdrawal should not be contemplated while present conditions in China persist. We could not now negotiate terms that would take care of our responsibilities towards the people or our material interests.
(3) We should lock for a suitable opportunity to offer to
negotiate our withdrawal with China, as soon as a more moderate regime emerges there. It is important to make this offer when not under Chinese pressure and before the economy of the Colony starts to run down in the 1980s. (4) Meanwhile we should show firmly that we intend to maintain
our position there, giving no indication that we contemplate
withdrawal.
(5)
At regular intervals and at any time the Chinese regime or attitude towards the Colony change significantly future policy towards the Colony should be reviewed, in
consultation with the Governor,
TOP SECRET
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