TNAG-0937-FCO40-1156-Visits-of-Sir-Murray-MacLehose--Governor-of-Hong-Kong--to-th-1980 — Page 96

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but sees it as taking several years. In the meantime he

believes that the short-term issue cannot be postponed much

beyond 1982. He doubts whether the Chinese appreciate the need

for detailed action in the short-term.

4. It is possible to see how the present Chinese administration

may see the Hong Kong (and Macao) situation evolving. The elements

appear to be:

5.

a) no compromise on Chinese sovereignty;

b) a readiness to see the present economic system

(specifically 'capitalism') continuing in Hong Kong

for several decades, in the interests of Chinese

modernisation;:

c) a desire to iron out the imbalance between Hong Kong

and Southern Guangdong, through intensive development;

d) a concept, as yet hazy, that in the future the notion

of 'special zones' on the Chinese side of the border

can be applied to Hong Kong, with different types of

administration according to circumstances in areas

whịch are all, in Peking's view, part of China.

e) (more speculatively) a recognition that in practice

objective (b) can only be gained by tolerance of some

kind of British administration in Hong Kong.

So far the Chinese have confined their public exposition

of this thesis on the one hand to action on the ground (special

zones, increased investment in Hong Kong) and on the other to

general assurances. I would not agree with Sir M MacLehose,

however, that Peking do not understand the short-term problem.

They have, apart from the NCNA, economic experts in the Territory

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/who