TNAG-0849-FCO40-1059-Future-of-Hong-Kong-New-Territories-leases-1979 — Page 173

SECRET

10 April 1979

VISIT TO CHINA AND THE LEASES

1.

You will by now have received the full records of the meetings with Deng Xiaoping, Huang Hua and Liao Chengzhi already covered in Peking telegrams 345 and 346. In this letter I would like to comment on the general atmosphere of the visit and draw preliminary conclusions on the question of the New Territories leases.

2. Throughout the whole visit to China it was very evidently the intention of the Chinese to impress us, in no particular order of priority, with:-

3.

(1) their willingness to deal with the Hong

Kong Government and their satisfaction with its performance;

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(111)

their desire for increased trade, tourism and investment, and for cooperation to achieve this;

their need for some time to come, and perhaps into the next century, of what they get out of Hong Kong with its present form of economy, and

(iv) realisation that in all this the maintenance

of investor confidence played a major part.

Although we already believed all this to be the case, its statement in such unequivocal terms and at such high levels is new and reassuring, and produces to some extent a new and easier situation.

4. Apart from the level at which we were received in Peking, there were other things which are worth mentioning to you as possibly indicative of Chinese attitudes or reactions. We here have always regarded Liao Chengzhi

/ as

RJT Mclaren Esq

Hong Kong and General Department

FCO

SECRET