TNAG-0529-FCO40-624-Future-of-Hong-Kong-1976 — Page 6

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POP BRETON

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(a)

Our conclusions so far are:

(i) that the existence of Hong Kong offers certain

positive advantages to Britain which could decline

over the next two decades;

(ii) that there are certain liabilities which may

increase over the same time span;

(iii) that the contingent immigration liability argues

very strongly in favour of the retention of the status quo; and decisively against a forcible

(iv)

(v)

(vi)

takeover by China;

that the Chinese for the foreseeable future have a strong practical interest in the maintenance of the status quo in llong Kong but the longer term prospects of Chinese tolerance are problematical; that peaceful transference of power at some time in the future might, arguably, avoid the risks of a débâcle but that any outward manifestation that agreement to this effect had been reached would quickly erode stability in the Colony;

that a clarification of Chinese attitudes would probably be needed in the early 1980s but the wisest course is to let sleeping dogs lie for the present. As a precaution, however, we have drawn up a list of signals which would help us to assess if Chinese attitudes to Hong Kong look as if they are changing. (e) This analysis makes no positive suggestions as to what might be said when we can no longer put off talking to the Chinese about the problem. It is perhaps premature to speculate on this but any views the Governor has would help us to carry our thinking further. We are

also conscious of the need to obtain a clearer idea of

the value of long Kong to us, particularly in the invisibles field. The present imbalance in trade, which might well grow, is the subject of some critical comment here. At present much of the case for the status quo rests on the contingent immigration liability should that status quo be disturbed. A disadvantage of this argument is that it cannot be used publicly.

- SECRET

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