TNAG-0332-FCO40-368-Visits-of-Secretary-of-State-for-Foreign-and-Commonwealth-Af-1972 — Page 19

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7. Sir Y. Kan raise the question of Hong Kong's inclusion in the Japanese offer

under the Generalised Preference Scheme. Clearly textiles must be excluded, but the

discussion of what could be included seemed to be going very slowly. Japan was to

have brought the Scheme into effect from 1 April. Could Sir Alec urge the matter

on during his visit to Tokyo. Sir Alec Douglas-liome said he would certainly do this.

clave Er. Lee said that it had been agreed that Hong Kong was to be qified as a

developing country, but the United Kingdom criteria were more stringent than those applied

by the EEC. Sir Alec said that he would look into this also. From 1 January, 1973

B*

the United Kingdom would apply EEC rules.

9. Hr. Saunders spoke of the shock of the US economic measures of August 1971. Did Britain see Japanese expansion more as an economic threat or as a political threat ? And how did we see the future relationship between Japan and China ? Sir Alec Douglas-dome

by Jefum, said that he would know more after his visit The worst outcome would be if Japan were to be driven in on herself. He hoped that we would be able to prevent a trade war developing with her, and that We should therefore try to achieve reasonable agreements between the FEC and Japan. He was not in a position to say whether Japan would turn

more to China.

10. Mr. Oswald Cheung asked about the long term future of Hong Kong in relation to

China. Sir Alec Douglas-home said that we had little direct contact with the Chinese

Government.

They appeared to be coming out of their shell, and to be developing contacts. He thought that the better relations between the UK and China became, the better for Hong Kong. We were at the moment discussing the question of Taiwan, but progress was slow. Basically, the Chinese hoped that nobody in the West would support Taiwan, and if we were to get an Ambassador installed in Peking, we might have to find some formula to the effect that Taiwan was part of China. Hr. Cheung asked whether in that case Britain would not lose negotiating power vis-a-vis China in the context of Hong Kong, Sir Alec Douglas-Home said that that was altogether too speculative. The best insurance

for Hong Kong was that they should make a success of the colony and thereby prove that it was a place where Chinese, who formed 80% of the population, wanted to live.

It was not possible to talk in terms of power in this question.

11. Hr. Woo said that it was important that Hong Kong should get a better deal so that

the younger generation should accept their status. They saw independent countries

receiving more from the United Kingdom than themselves. Sir Alec Douglas-Some said that

/he

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