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the rejection was sharp and categorical.
There was nothing in the Chinese answer to suggest that they would be prepared to open a dialogue on the subject. On the contrary, they have so far shown themselves unwilling to move from a generalised assurance to investors.
5 Nor am I much encouraged by the domestic situation in China at this point. The trial of the Gang of Four may have ended and Deng Xiaoping's ascendancy may seem assured; but I am not convinced that the in-fighting is over yet and it seems likely that the top leadership are likely to be pre-occupied with the political manoeuvring going on at the top and the enormous economic problems now facing them. Is there not a danger that if we suggest talks on Hong Kong too early we shall raise a domestically contentious
issue which will be too hot for even the top leadership to handle at this time, with the result that we shall receive either another rebuff or political demands which we cannot meet. A point on which again I think we are all agreed is that we should want the maximum pressure to have built up on them from their own people in Hong Kong to give us the best negotiating posture when we come to the point of opening discussions.
6 We then come to the question of whether the talks can really be informal. Subject to Murray MacLehose's view, I do not see the NCNA man in Hong Kong as a likely intermediary. Who in Peking on the Chinese side could be given sufficient authority for informal exchanges? And if the talks have to be conducted at a very senior level will they not inevitably become negotiations?
7
So far as the paper on the long-term future is concerned, I take your point on the need to give priority to the political questions which may come up quite soon in discussion with the Chinese. We think that in addition Ministers will require a rather wider discussion paper, in order to help establish what our objectives should be in any negotiations about Hong Kong's future. We are working on this. But we will certainly give priority to the issues which you mention so that at any rate an outline recommendation on these points is ready before the Secretary of State goes to China in the spring.
8 It would be helpful if you, and Murray MacLehose, could let me have any initial thoughts on these points by telegram to reach us by 24 January.
cc:
Sir Murray MacLehose, GBE, KCMG, KCVO
HONG KONG
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