TNAG-0344-FCO40-380-Exports-from-Hong-Kong-to-France-1972 — Page 8

CONVIDENTIAL

AR ROYLE'S VISIT TO PARIS, 21-23 MARCH 1972

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IWG KONG:

POSITION PAPER

1. The Crown Colony of Hong Kong can have no constitutional

progress towards independence. This is because of the attitude of the People's Republic of China, which has always regorded Hong Kong as a part of China to be regained at the appropriate time. Meanwhile, the Chinese Government has made

it clear on more than one occasion that it expects the

constitutional status quo in the Colony to continue.

2. The latest indication of this attitude has followed on

China's admission to the United Nations. In a letter dated

8 March 1972, addressed to the Chairman of the United Nations Special Committee on the granting of independence to Colonial Territories (the Committee of 24), the Permanent Representative

of China to the United Nations stated:

"As is known to all, the questions of Hong Long and Macao Jelong to the category of questions resulting from the

cries of unequal treaties left over by history, treaties which the imperialists imposed on China. Hong Kong and Macao are part of Chine e territory occupied by the

british and Portuguese uthroities.

The settlement of

the questions of Hong Kong und Macao is entirely within China's sovereign right and does not at all fall under the

the ordinary category of 'Colo.ial Territories'

Chinese Government has concistently held that they should be settled in an appropriate way when conditions are ripe".

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3.

We have to accept that Hong Kong is indefensible and that

if the Chinese wished to take over they could do so by force at any time. Hong Kong's future therefore is bound in reality solely by tacit agreement between ourselves and the Chinese. Legally we maintain that Hong Kong was ceded to us in perpetuity

The Chinese and the New Territories were leased until 1997.

do not accept the legal constraint, but they have recently made known in a number of ways, that they do not intend to

raise the question of Hong Kong for a long time.

In the course

of a private conversation with Mr Malcolm MacDonald in October 1971, Chou En-lai mentioned the expiry of the New Territories lcaso, the implication being that China did not intend to take

The Chinese have also back Hong Kong at least until then,

reassured a number of Hong Kong Chinese businessmen that Hong

Kong still has a considerable future.

4. China derives considerable benefits from the Colony which provides easy access to world markets and serves as an invaluable

base for travel and intelligence activities.

Hong Kong

depends heavily on China for essential supplies, especially food, and so is of direct economic value to China.

Between

a third and a half of China's foreign exchange earnings comes via the Colony. These earnings play a major role in financing China's trade deficits with other areas of the non-communi st

world.

2.

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5.

Although China stands to derive substantial economic

benoit from the maintenance of the constitutional status quo

of the Colony, there is no reason to suppose that the local

communists in Hong Kong will not continue indefinitely in their

efforts to undermine the authority of the Hong Kong Government

and to win over the general public to their own side.

6. We expect that our improved relations with China culminating

in the exchange of Ambasadors will be of cenefit to Hong Kong.

FRENCH IMPORT RESTRICTIONS ON GOODS IMPORTED FROM HONG KONG

7. Hong Kong maintains an open-door policy for imports of

French as well as other foreign products. Hong og take the

view that the French quota restrictions cannot be subject to negotiation (because this would give them an air of legality). France maintains, unilaterally, restrictions contrary to the

provisions of the GATT on imports of certain goods from Hong Kong and also restricts goods from a wider range of sources. 8. The French Journal Official of 6 September 1970 published

a summary of all goods subject to quantitative restrictions

The up-dated -hen imported into France from all sources.

list notes restrictions on the following types of goods from the group of countries which includes Great Britain and her dependencies (eg Hong Kong):

Certain live animals, animal and vegetable products, prepared foodstuffs

Certain mineral products and products of the chemical and allied industries

3.

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