TNAG-1036-FCO40-1286-Future-of-Hong-Kong-1981 — Page 116

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indefinitely. In May 1980, Gu Mu, then Vice Premier,

told the Hong Kong Financial Secretary that the Chinese

would provide the solution for Hong Kong. A future

Chinese administration might aim at a variation on the

them of a special zone for Hong Kong, within the Chinese

state but with a separate economic system and currency.

This might involve some British participation, in the

form of contract administrative or specialist personnel,

but eventually using a purely local administration of

Hong Kong Chinese with 'tributary' relationship to Peking.

In any case, there would have to be a transition period,

probably protracted in order to preserve confidence.

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/IMPLICATIONS FOR HMG

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