TNAG-0850-FCO40-1060-Future-of-Hong-Kong-New-Territories-leases-1979 — Page 128

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THE HONG KONG QUESTION WAS COMPLEX, NOT ONLY A QUESTION OF SINO- BRITISH RELATIONS, BUT ONE IN WHICH THE OUTSIDE WORLD WAS INTERESTED. ANY MEASURES WHICH PREJUDICED CHINA'S POSITION

ON HONG KONG WOULD HAVE REPERCUSSIONS IN THE WORLD. THE BRITISH SIDE HAD PROBABLY GUESSED THE LIKELY CHINESE RESPONSE WHEN THEY PUT THE PROPOSALS FORWARD. IF THE BRITISH SIDE DID NOT FOLLOW CHINESE ADVICE THEY COULD GUESS WHAT CHINESE REACTION WOULD BE AND THAT WOULD NOT ASSIST CONFIDENCE. BOTH SIDES SHOULD TRY TO ENCOURAGE THE FURTHER DEVELOPMENT OF HONG KONG, ON THE BASIS THAT CHINA'S POSITION WAS NOT PREJUDICED.

4. ! EXPLAINED THAT THIS WAS PRECISELY WHAT WE HAD TRIED TO DO. INVESTORS IN HONG KONG LOOKED NOT ONLY AT CHINESE STATMENTS BUT ALSO AT THE HARD LEGAL POSITION AND NATURALLY ASKED WHAT THEIR ASSETS WERE WORTH AS THE TIME FRAME SHORTENED, 1 FEARED THAT IF WE DID NOTHING NOW, CONFIDENCE WOULD BEGIN TO WANE, NOT PERHAPS TOMORROW BUT VERY SOON, AND ONCE THAT BEGAN TO HAPPEN, IT WOULD BE VERY DIFFICULT TO RESTORE. THAT WAS AND REMAINED OUR PROBLEM. 1 HOPED THAT BOTH SIDES COULD KEEP IN TOUCH ON THIS AND ABY OTHER PROBLEMS AFFECTING HONG KONG AND ASKED WHETHER THERE WOULD BE ANY PARALLEL MESSAGE VIA THE NCNA IN MONG KONG.

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5. SONG SAID THAT THEY WOULD BE INFORMING NCNA IN HONG KONG BUT THE FORMAL REPLY WAS THE ONE HE WAS DELIVERING, HE AGREED THAT WE SHOULD MAINTAIN CLOSE CONTACT, IF WE HAD ANY VIEWS OR SUGGESTIONS WE SHOULD PUT THEM FORWARD,

HE AGAIN DREW OUR

ATTENTION TO DENG'S REMARKS IN MARCH AND SAID SPECIAL WEIGHT SHOULD BE ATTACHED TO THEM.

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6. I SAID THAT WE NOTED AND GREATLY APPRECIATED THOSE REMARKS

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BUT THE FACT WAS WE STILL HAD A PROBLEM.

CRADOCK

FILES:

HEAD OF HKGD

HEAD OF PED

PS

PS/LPS

FS/R BLAKER

PS/PUS

SIR A. DUFF

STR &

SIR E. YOUDE KR CORTAZZI

堂

(PERSONAL

久

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