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assess its political stability and the character of its policies both internal and external (not least towards Taiwan) before we can
determine the best negotiating posture. These considerations point to negotiations in the mid-1980s; but obviously the question will need
to be kept under constant review in the light of the evolving situation in China and in the Colony. Delay is not without risk, eg of a crisis in the Colony as a result of instability in China similar to 1967; but our experience of events then provides us with some guide as to the signs of approaching trouble and we need not be as unprepared (Annex A). And delay has advantages in permitting the possible evolution of a less harsh and idiosyncratic regime in China and a rising standard of living if the economy continues to develop as at present.
17.
It is premature to speculate on what our own attitudes, and those of the Chinese, will be at a date so far in the future. Some options are given in Annex B. Perhaps the most that could be said is that any arrangement designed to avoid the worst difficulties for us would need to offer sufficient inducements to the Chinese both political, to help them over the sovereignty issue and the 1997 difficulty, and economic. But there is no certainty that any approach, however carefully timed and however loaded with inducements for the Chinese, would lead to a clear-cut agreement. They may calculate that any agreement would place them in a weaker situation and ourselves in a stronger than at present. They may seek to put us off with the flexible but vague formulae in paragraph 11 above and expect us, as at present, to deduce their attitudes to the Colony by their actions. These might point to a wish for the present status quo to continue or a wish for a gradual evolutionary change eg by the expansion of their economic, political and cultural activities: either way we would imagine they would be ready to give confidence building signs to the business community and the population generally. Nevertheless
it should remain our objective to reach some clear-cut understanding with China if this is at all achievable.
18. One thing seems clear however: as it is not now possible
to envisage a meaningful discussion of the problem in its entirety, there is nothing to be said for discussing particular aspects of it
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