TNAG-0569-FCO40-702-Planning-paper-on-Hong-Kong-1976 — Page 13

SECRET AND PERSONAL

PECERTO IN

52

51

3 JUN 1975

~CK013/5XD

HAH CORTAZZI ESQ CMG

FOREIGN AND COMMONWEALTH OFFICE

Dear Hugh,

BRITISH EMBASSY

II KUANG HUA LU

CHIEN KUO MEN WAY PEKING

PEOPLES REPUBLIC OF CHINA

24 May 1976

See my

вену

овие.

Mr O

Please beare there

mine of points in mind +

3 June

Curculate

20

Mr. Svend to members of planning

Man.

During the Secretary of State's visit to China we discussed the

Planning Paper on Hong Kong.· I will not seek in this letter to comment on the details. But it is agreed by everyone that essential elements in the argument are what Peking will tolerate and the need, as the Paper puts it, "to avoid any action that may cause China to make difficulties for the colony". I accordingly undertook to write on the major factors.as I see them from Peking.

i/vi

2. The first point may be self-evident but is nonetheless crucial for that. It is that China has since the beginning of the year entered a period of great instability. Last year it seemed that Chou En-lai had succeeded in establishing a cohesive administration based on policies commanding a consensus among the leadership. With the death of Chou, the fall of Teng Hsiao-p'ing and the continuing power struggle among the leadership as the death of Mao approaches, China has entered a period of great uncertainty which may last for some time. It is in consequence very much in our interest to do nothing in Hong Kong which could draw the question of Hong Kong into the policy disputes here.

3. The first practical interest of Peking in the colony is the economic benefit they draw from it primarily as a source of foreign exchange and they would look askance at any action which reduced that benefit. But beyond this it will be very much in our interest that the colony should not come into the limelight, e.g., through any form of constitutional crisis between Hong Kong and Westminster, nor should the Chinese be given any grounds for suspecting that we plan to change the political status quo in a manner which they would consider as to their detriment.

4. There are two categories of developments, apart from the constitutional crisis which I assume it will be HMG's prime interest to avoid, which could draw the attention of the Chinese leadership or factions within it to the colony. The first would be public unrest. The emphasis here at the present time is on "politics in command" not pragmatism and the temptation to some factions in Peking to exploit unrest could be strong. We have a strong interest in ensuring that they are not given any opportunity to do so. The Governor will be better able than I am to judge whether any measures (e.g. those concerned with public sector rents) proposed in the paper need cause concern on this score.

.1.

SECRET