TNAG-0753-FCO40-957-Future-of-Hong-Kong-1978 — Page 103

CODE 18-77

SECRET

Mr Stagg, HK&GD

w Too

Reference

THE FUTURE OF HONG KONG

1. Thank you for letting me see a copy of your skeleton draft. I should be grateful if you could continue to keep us generally involved.

2. I suspect that it is easier to think about the future of Hong Kong if British and Chinese interests are spelt out. Accordingly, it might be useful to start your paper, after the Introduction, with a section headed "British Interests". They seem to me to be the following:-

a) Moral and political responsibility for the continued

well-being of the people of Hong Kong.

b) Legal responsibilities, eg for pensions, if the

Colony collapses.

c) Economic interests - the net benefit to the British

economy is, I believe, small, but presumably there are important individual British interests.

In the light of these interests, the British Government can be assumed to continue to wish to shoulder responsibility for Hong Kong for at least the next 30 years.

3.

There could then be a section on Chinese interests. These seem to me to be:-

a) Economic gains, which will increase as Chinese

dependence on Western imports increases.

b) The need to keep up appearances in terms of Chinese

claims to Hong Kong.

c) The need to avoid harm to China through hostile

activities in Hong Kong, eg by the Russians or Taiwanese.

It follows that independence will continue not to be a realistic possibility for Hong Kong, but that the Chinese Government will want British rule to continue for at least the next 30 years, given that the economic benefits to China would not survive the reabsorption of Hong Kong into China.

THIS IS A COPY

THE ORIGINAL HAS BEEN RETAINED IN THE DEPARTMENT UNDER SECTION 344) OF THE PUBLIC RECORDS ACT 1950

ODADDYN

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