TNAG-0839-FCO40-1048-Relations-between-Hong-Kong-and-China-1979 — Page 104

WIR

GR 563

CONFIDENTIAL

FIDENTIAL

FM PEKING 110924Z

TO PRIORITY FCO

TELEGRAM NUMBER 431 OF 11 MAY 79

Hkk

RECEIVED

STRY NO. 51

1 4 MAY 1979

DESK OFFICER INDEX

میر

PA

INFO PRIORITY HONG KONG, WASHINGTON, Dor ICREA Espor)

MOD AND ECGD

MIPT:

SINC-BRITISH RELATIONS

REGISTA

Apa

Tuke

1. OUR BILATERAL RELATIONS HAVE ADVANCED RAPIDLY OVER THE PAST YEAR AND ARE AT THEIR BEST EVER. WE HAVE HAD A SERIES OF HIGH LEVEL VISITS IN BOTH DIRECTIONS. PREMIER HUA HAS ACCEPTED AN INVITATION TO VISIT BRITAIN (AS WELL AS FRANCE AND GERMANY) AND HAS PROPOSED A DATE AT THE END OF OCTOBER. THE DUKE OF KENT IS TO OPEN THE BRITISH ENERGY EXHIBITION IN PEKING IN JUNE. OVER THE LAST YEAR WE HAVE CONCLUDED A SCIENCE AND TECHNOLOGY AGREEMENT, AND ECONOMIC COOPERATION AGREEMENT PROVIDING FOR US DOLLARS 14 BILLION WORTH OF JOINT ECONOMIC ACTIVITY TO 1985, AND ARE NEGOTIATING AN AIR SERVICES AGREEMENT. WE EXPECT SOME 300-400 CHINESE STUDENTS AND GRADUATES IN BRITAIN IN 1979. WE HAVE TOLD THE CHINESE THAT WE ARE READY TO PROVIDE CERTTCN ITEMS OF DEFENCE EQUIPMENT AS PART OF A WIDER BALANCED RELATIONSHIP AND NEGOTIATIONS FOR SUPPLY OF HARRIER AND OTHER ITEMS

ARE GOING AHEAD,

2.

?

REFLECTING THE ABOVE AND CHINA'S NEED FOR HONG KONG EXPERTISE AND FOREIGN CURRENCY. HONG KONG-CHINESE RELATIONS ARE AT A HIGH POINT. IN RESPONSE TO THE FIRST EVER OFFICIAL CHINESE INVITATION, THE GOVERNOR PAID A SUCCESSFUL VISIT TO PEKING IN MARCH AND HAD USEFUL TALKS WITH DENG XIAOPING.

3. AS I SEE IT, THE RATIONALE FOR OUR APPROACH TO SINO- BRITISH RELATIONS SHOULD BE:

(A) IT IS VERY MUCH IN THE UK INTEREST THAT THE CHINESE MODERNISATION PROGRAMME SHOULD MAKE PROGRESS WITH OUR HELP. BY OUR RESPONSE WE HELP CONFIRM THE MAIN LINES OF THE MORE OPEN AND PRO-WESTERN POLICY AND ACQUIRE BOTH POLITICAL GOODWILL AND COMMERCIAL PROFIT IN THE PROCESS.

CONFIDENTIAL

(B)

20