TNAG-1036-FCO40-1286-Future-of-Hong-Kong-1981 — Page 107

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relatively easy to explain the change as the natural result

of improved Sino-UK relations and as ending the anomaly of

the NCNA role. From our point of view there would be

advantage in the official depending from the Ministry of

Foreign Affairs as was the case under the Nationalist

Government in the lat 1940s. We would in any case not want

to accept a representative of the Guangdong Provincial

Government.

This would cut across our practice of dealing

with Peking on major policy affecting Hong Kong and might

cause difficulties if a provincial administration were in

the future to adopt a more adventurist policy than the central

government towards the Territory. However, even the straight

formalisation of Chinese Government representation in Hong

Kong would be regarded as of considerable significance by

public opinion in the Territory. Taken on its own, it could

be seen as a move towards an agreement with China. Damage

to confidence would depend on the context in which the move

was set. If the matter came up during the next 5 years, this

would probably mean in practice moves on our part to

reassure investors and in particular to overcome the

/difficulty

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Dd 0532000 400 M 5/78 HMSO Bracknell