TNAG-0943-FCO40-1162-Future-of-Hong-Kong-1980 — Page 176

CONFIDENTIAL

PA

30

owoli ?

2115

Mr Morrico 22713

Mr Williams on

Aur 2715

NEW TERRITORIES LEASES

Hick ouoli

Reference

RECEIVED IN REGISTRY NO. 51

DESK

INDEX

2 8 MAY 1980

הל

CHIEF SECRETARY'S VIEWS

Aw 28:15

1.

I discussed this subject with Sir Jack Cater. He had seen the record of the Financial Secretary's discussions in Peking, although not the covering letter from the Ambassador.

2.

Sir J Cater's view is that, pace Mr Cradock, we should not move too quickly with the Chinese, for fear of getting a rebuff. He accepts that the Chinese are showing some signs of movement but notes Guu's reluctance to consider concrete proposals.

3. Sir Jack puts a good deal of stress on the Chinese interest in developing the special zones across the border, such as Shumchun. He speculates about their interest in reaching a point of balance between the economic standards in these areas and Hong Kong. These will however take a long time.

4.

Sir Jack nevertheless agrees that we should be looking at the legal implications of possible solutions or partial solutions, including a declaration on sovereignty. He himself sees it as perfectly possible that eventually we may move through a series of transitional stages to some kind of dual Commissionership, or at any rate a much greater Chinese participation in Hong Kong internal affairs. But he sees the Chinese as determined to preserve the capitalist system in Hong Kong, notably the independence of the Hong Kong dollar.

22 May 1980

RD Clift

Hong Kong and General Department

CODE 18-77

CONFIDENTIAL

SS 8/78