(d)
SECRET
4.
Long-term solutions (para 28). The paper seems to assume that any long-term solution will involve (a) a concession on sovereignty and (b) a completely new form of government with a large degree of involvement by China. I agree that (a) is almost certainly true. But (b) is both arguable and affects fundamentally all the considerations in para 28. It is correct to say (para 27) that it is too early to forecast now what solutions will prove acceptable to the Chinese in sixteen years. Nevertheless, and allowing for a concession on ultimate sovereignty falling short of total reabsorption into China, one can envisage two broad lines of development:
(i) Hong Kong under Chinese control but with its
own laws, currency, capitalist system and foreign participation in the administration, ie Hong Kong as a "Special Municipality" within China (analogous to the British Concession in Hankow post-1927); and
(ii)
Hong Kong continuing under British
administrative control albeit with greater influence exercised by China (analogous to Macau).
The consequences of these two different scenarios need to be analysed separately. The solution as at (i) would raise in an acute form the problems touched on in para 28. The solution in (ii) would raise some, but not all. There then needs to be a third section dealing with the implications of no solution being found in the next 10 years on eg civil service recruitment, the police etc.
Annexes
7.
The following comments cover the present annexes.
Representation
(i)
A:
(a)
SECRET
Para 3. In dealing with the history of official representation it is probably not worth making more than a passing reference to the Nationalist Commissioner, T W Kwok. But, for what it is worth, our records of his title do not correspond with what is in the draft. Although on one occasion he appears to have referred to himself, in conversation with the Governor, as Special Commissioner in Hong Kong of the Chinese Foreign Office, the official title he used on his letterhead was Office of the Special Commissioner for Kwangtung and Kwangsi, Ministry of Foreign Affairs, Republic of China. In Chinese, and in his English 'chop', the full title was Hong Kong Office of the Special Commissioner for Kwangtung etc. His title thus implied that Hong Kong was part of Kwangtung. So far as can be seen from the record it is correct that Kwok never presented any credentials. But he did have dealings with the Government, both in the form of correspondence and meetings with the Governor. They were time consuming and not
productive.
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