TNAG-0839-FCO40-1048-Relations-between-Hong-Kong-and-China-1979 — Page 259

3 AT LEAST A CHINESE RE-STATEMENT OF THEIR POSITION ON

SOVEREIGNTY IS POSSIBLE, AND WOULD BE COMPATIBLE WITH DENG XIAOPING'S REMARKS TO US SENATORS REPORTED IN THE GUARDIAN OF 10 JANUARY (BUT NOT IN NEWS FROM FOREIGN AGENCIES, WHICH COVERED THE REST OF DENG'S INTERVIEW). DENG IS REPORTED AS HAVING

SAID THAT TAIWAN'S STATUS MIGHT BE SIMILAR TO THAT OF HONG KONG

OR MACAO, WHICH CHINA COULD EASILY TAKE OVER: "BUT REFRAINS FROM DOING SO BECAUSE OF CHINA'S PROFITABLE RELATIONS WITH THEM**.

CRADOCK

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IMMEDIATE