TNAG-0850-FCO40-1060-Future-of-Hong-Kong-New-Territories-leases-1979 — Page 107

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206

HICK

NAJAVED II MIGATRY NO. $1

- 8 OCT 1979

DESK OFFICER

SECRET

INDEK

по

SECRET

FM PEKING 058833%

OCT 79

TO PRIORITY FCO

TELEGRAM NUMBER 864 OF 5 OCTOBER

INFO PRIORITY HONG KONG.

HONG KONG TELNO.1343:

NEW TERRITORIES LEASES.

See Bas

ZZZA

10 I AM NOT SANGUINE ABOUT THE CHANCES OF THE CHINESE

UNDER PRESSURE OF MARKET FORCES COMING TO ACCEPT OUR PROPOSALS, THEY HAVE SAID, AND WE MUST BELIEVE THEM, THAT IF WE PERSIST WITH OUR LEGISLATION THEY WILL HAVE TO REACT (PRESUMABLY BY A PUBLIC STATEMENT) AND THAT THIS WOULD NOT HELP CONFIDENCE.

ARE THEREFORE PREPARED TO INCUR ECONOMIC DAMAGE NOW IN PURSUIT OF THEIR POLITICAL OBJECTIVES AND THIS COULD WELL REMAIN THE

CASE IN THE FUTURE.

2.

THEY

THEY WILL CALCULATE THAT WE TOO ARE UNDER ECONOMIC PRESSURE, THAT OUR RECENT APPROACH IS PROOF OF THIS AND THAT TIME IS ON THE CHINESE SIDE.

3. WE MUST ALSO TAKE INTO ACCOUNT THEAT THE CHINESE SEE HONG KONG IN A WIDER CONTEXT, INCLUDING TAIWAN AND MACAO, WITH TAIWAN THE MOST IMPORTANT ELEMENT. THEY WILL BE UNWILLING TO TAKE ACTION IN RESPECT OF HONG KONG THAT COULD UPSET THEIR TAIWAN PLANNING OR WEAKEN THEIR POSITION IN RELATION TO THE TAIWAN AUTHORITIES. THE ESSENCE OF THEIR POSITION ON TAIWAN IS THAT SOVEREIGNTY MUST BE CONCEDED. ONCE THAT IS DONE, VERY LIBERAL ARRANGEMENTS FOR AUTONOMY CAN BE MADE. EQUALLY ON MACAO IT NOW SEEMS, CONTRARY TO OUR EARLIER INFORMATION, THAT THE PORTUGUESE MAY HAVE CONCLUDED A SECRET AGREEMENT RECOGNISING CHINESE SOVEREIGNTY (GEORGE'S TELELTTER 920/254/1 OF 30 JULY TO SAMUEL). IT IS NOT UNTHINKABLE THAT THE CHINESE HOPE TO USE HONLJKONG AND MACAO AS EXAMPLES FOR THE PEOPLE AND GOVERNMENT OF TAIWAN,

SECRET

4. ALL THIS