T MOS
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5. On the second aspect of problem 3 (paragraph 11(ii) of the letter), I find the Governor's point a little obscure. It is, I think, the essence of our position that, while we are doing nothing to which the Chinese need object, we are in fact paving the way for a continuation of the political situation beyond 1997. We are affecting the Chinese position though not contradicting it. This is true whatever specific wording we choose for the phrase in issue. And we must expect the Chinese to be alive to it. This may impel them to issue a statement giving their point of view when we pass the Order in Council. There is the further and more technical point that our wording may be held to imply that property rights end with British administration. I doubt whether the Chinese would take this point: it is too technical, too legalistic. But we may be able to overcome this particular problem by amending the wording to read "at least as long as" in place of "as long as".
6.
As for future action on our part, I am sure that we must wait a little and see what reactions come in. Depending what these are, we may, through this Embassy or locally in Hong Kong, need to clarify matters if the Chinese appear to have misunderstood the position. We cannot exclude that they will try some different approach - and Huang Hua's remarks about representation (which Cui Mingtang picked up passingly when he saw Richard Samuel) give them a lead in. But if it appears that the Chinese have understood what we are about and do not object, then we should need to tackle the question of ministerial endorsement for an Order in Council. I myself doubt whether we shall ever get a clear-cut indication of agreement from the Chinese side. Even in the best case we are likely to have to take some thing of a leap in the dark. One way of proceeding, however, would be to ask ministers to agree to our telling the Chinese what we intended to do, and to allow them time (some weeks) to react before taking action. This approach should, I suggest, be at working Embassy level, either myself or, perhaps better, the Head of Chancery. Any more high level approach would give the exercise too much political content and detract from our presentation of it as a piece of legal house-keeping designed simply to maintain investment in the interest of both sides. of course be informing the Chinese and giving them time to react rather than consulting and seeking agreement. In the light of Chinese reaction - or non-reaction we could make a second approach to ministers, hopefully recommending the Order be approved.
Your con
We should
cc
Dundon Serge
fr
PERCY CRADOCK
HE Sir Murray MacLehose GBE KCMG KCVO
Governor
HONG KONG
RC Samuel Esq
FED
FCO
SECRET
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