ir Quantrill
Mr Stewart
о
SECRET
UK EYES A
неконо
JIC PAPER: THE THREAT TO HONG KONG
No of a
A
1. Mr Clark of the Cabinet Office has invited attendance (letter attached) at a meeting on 6 January for preliminary discussions on the revision of the 1973 paper (also attached).
2. I generally agree with Mr Clark's suggestions as to the format of the new paper and the detailed points which he suggests are in particular need of revision. There are two points which he has raised which I feel are especially important and which seemed to have been overlooked in 1973.
3. While it is unlikely that China could or would want to run Hong Kong as a free port and trading centre if the territory were to be incorporated into the PRC, it is perhaps no more unthinkable than the present situation where the world's most "Communist" state condones on its borders the most "capitalist”
one.
4. Similarly, the 1973 paper ignores the possibility of non-Communist disturbances in Hong Kong which could precipitate Chinese intervention. Mr Clark sights the recent police disturbances but there are others which one could envisage. A desperate attempt by KMT activists to gain control, perhaps to compensate for withdrawal of US recognition; or action by radicals outside the control of Peking. These, and any others that one could think of are unlikely, but then so was the thought of the police mutiny.
5. I am not sure that I would agree entirely with Mr Clark's comments in his third paragraph on the greatly increased significance of 1997 within the life span of a new paper. Certainly more thought must be given to this question as the date draws nearer, but I believe that by 1983 it will still be too early for the expiry of the lease to be dominating the thoughts of potential investors. My personal view is that that stage will only be reached in the private sector which as far as confidence is concerned is the one that matters - when the end of the pay-back period for investment draws close to 1997. I cannot believe that in Hong Kong many investors would expect to wait fourteen years for a return.
4 January 1978
J Thompson
Hong Kong & General Department
SECRET
UK EYES A
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