TNAG-0839-FCO40-1048-Relations-between-Hong-Kong-and-China-1979 — Page 163

CONFIDENTIAL

5.

DSR 11C

I

prosperity and well-being of its people are as much in

the interests of China as they are of this country.

have welcomed the growing practical cooperation between

Hong Kong and China, and the many indications which the

Chinese have given that their intentions towards the

territory are benevolent.

Territories lease in 1997 is casting a long shadow forward

and it will not be long before it begins to create problems

of confidence in Hong Kong. The understanding and

cooperation of the Chinese authorities will be required if

satisfactory solutions are to be found.

But the expiry of the New

'

8. In the trade field, China's modernisation plans offer

scope for substantial contracts and I see no reason why

Britain should get less of these than our European

partners; competition from the US will now be much greater.

1979 is a key year for China's future development plans,

and our own prospects in China will call for a lot of

tough and flexible bargaining. I need not rehease the

background to the Government's acceptance that our exports

should include some defensive equipment.

But I am

determined that the Chinese should not see us only or even

primarily as arms suppliers; we must continue in dealing

with the Chinese to draw their attention to the need that

our trading relations be balanced and include a high civil

element.

9. I also believe it right to respond to China's

enthusiasm for modernisation by exploiting the educational,

scientific and cultural fields.

I want to see us well

/into English

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