TNAG-0850-FCO40-1060-Future-of-Hong-Kong-New-Territories-leases-1979 — Page 84

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4. I THINK THAT WE SHOULD NOW STICK TO REITERATING THE LATTER FOINT, AND THER WAIT AND SEE WHAT HAPPENS. I SEE NO ADVANTAGE IN SEEKING A DIALOGUE UNTIL THE CHINESE ACCEPT THAT THERE IS A FAIRLY URGENT PROBLEM TO HAVE A DIALOGUE ABOUT. WHILE THEY MAY BE SO PERSUADED BY THE SECRETARY OF STATE, THEY MAY PREFER TO WAIT UNTIL PRESSURES ON THEM MOUNT FROM HONG KONG. AS MENTIONED IN MY TELNO 1343 IN DUE COURSE WE ARE LIKELY TO GET HINTS ON HOW THE CHINESE SEE THE WAY FORWARD.

5. THEREFORE SUGGEST THAT THE SECRETARY OF STATE CONFINES HIMSELF TO MAKING IT CLEAR TO THE CHINESE THAT OUR PROPOSAL ABOUT LEASES WAS A CAREFULLY THOUGHT OUT METHOD OF TACKLING A GENUINE PROBLEM, AND FOR DOING SO WITHOUT PREJUDICING THE CHINESE POSITION ON THE LONG-TERM FUTURE. WE DO NOT HAVE TO SOLVE THIS PROBLEM IMMEDIATELY, BUT IT MUST BE DEALT WITH FAIRLY

SOON IF INVESTMENT IS NOT TO BE AFFECTED AND WITH IT HONG KONG'S ABILITY TO CONTRIBUTE TO MODERNISATION OF CHINA. UNFORTUNATELY, GENERALISED ASSURANCES WILL NOT BE SUFFICIENT TO DEAL WITH THIS

DIFFICULTY.

6. I WOULD PREFER TO GO NO FURTHER FOR THE TIME BEING.

7. I TAKE THE ABASSADOR'S POINT ABOUT SONG SPEAKING OUT OF TURN. PERHAPS THE S OF S COULD SAY SOMETHING · ABOUT CONFIDENTIALITY TO HUA OR HUANG. I DO NOT RECOMMEND REOPENING THE ISSUE IN PEKING IN ANY WAY.

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SIR A DUFF

MR CORTAZZI MR MURRAY

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