TNAG-0744-FCO40-948-Relations-between-China-and-Hong-Kong-1978 — Page 41

CONFIDENTIA

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GTS 458

CONFIDENTIAL

DESKBY 181200Z

FM PEKING 181916Z DEC 78

TO IMMEDIATE FCO

TELNO 923 OF 18 DEC

ACK 2011

RECEIVED IN REGISTRYND 51

1 DIC

INTREX

OFFICE

19/12/

REGISTRY Action Takan

INFO IMMEDIATE WASHINGTON, HONG KONG, TOKYO, MOSCOW AND MODUK

NRMIPT: NORMALISATION

1. AS SEEN FROM HERE, THE CHINESE HAVE DONE WELL. THEY HAVE ATTAINED TRADITIONAL MAJOR FOREIGN POLICY OBJECTIVES AT RELAT- IVELY LOW COST. THE US NOW RECOGNISES THAT TAIWAN IS PART OF CHINA. THE US/TAIWAN DEFENCE TREATY IS TO BE DIMANTLED AND US

THE CHINESE MILITARY PERSONNEL AND INSTALLATIONS WITHDRAWN.

MAY REASONABLY HOPE THAT UNITED FRONT TACTICS WILL RAPIDLY! ERODE CHIANG CHING-KUO'S POSITION.

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2. THEY HAVE HAD TO PAY BY ACQUIESCENCE IN US NON-OFFICIAL RELATIONS WITH TAIWAN AND IN THE US SUPPLY OF SOME DEFENSIVE WEAPONS. BUT IN HIS PRESS CONFERENCE HUA KUO-FENG MADE IT CLEAR THAT THE SUPPLY OF WEAPONS WAS INCOMPATIBLE WITHE THE PRINCIPLES OF NORMALISATION, THUS LEAVING IT OPEN TO THE CHINESE TO MAKE A GREAT ISSUE OF ANY NEW CONTRACTS. THE CHINESE MAY ALSO SEE SOME ADVANTAGE IN TAIWAN MAINTAINING SOME RELATIONS WITH THE UNITED STATES UNTIL UNIFICATION RATHER THAN BEING TOTALLY CAST OFF, WITH CONSEQUENT GREATER OPPORTUNITY FOR SOVIET

MEDDLING.

፡

3. TENG'S STATEMENT THAT CHINA WOULD NOT SEEK TO REDUCE TAIWAN'S STANDARD OF LIVING FOR A GOOD TIME AFTER REUNIFICATION SHOWS PEKING'S READINESS TO PERMIT A DEGREE OF POLITICAL AND ECONOMIC

PLURALISM AND IS REASSURING EG OVER HONG KONG.

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