CONFIDENTIAL
DSR 11C
Surce we
count arque Hot thre Hiat genis to Betish uiterests world be significant, The Hong Kong Gotemment too world
ибри ве be convinced.
DOT will be difficult to convince: and we cannot
offer a statement on the lines of stage 3 to the
Chinese unless the UK side is unanimous This
approach is likely therefore to lead to an impasse
on the UK side.
(c) Do nothing
In spite of the risks involved in option (a) and the small chance of option (b) succeeding, it will be politically very difficult to leave things as they stand now. During the Secretary of State's talks with Huang Hua, Lord Goronwy-Roberts had said that the UK thought the agreement could be signed now, but the appropriate officials should talk to each other. was followed up in your conversation with Mr Sung
when you sounded out the latest Chinese position.
་་་་
This
4. The best option seems to be (a). In spite of the risk of break down of the talks and consequent political embarrassment, we should seek to re-open negotiations (through the Embassy in Peking) on the basis of steps 1
and 2 and thoroughly test out the Chinese position. If all went well a UK team could go out for the final stages of negotiation, which could include seeking substantive improvements to the initialled text. the UK side would need to look again at the balance of risk and advantage, both politically and commercially, in offering a statement on the liner of stage 3.
RECOMMENDATION
V
If not,
5. I therefore recommend that Peking be instructed to speak to the Chinese authorities on the basis of their steps 1 and 2 only. If you agree, we will clear a draft telegram with DOT.
CONFIDENTIAL
D 107991 400,000 7/76 904 953
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