TNAG-1038-FCO40-1288-Future-of-Hong-Kong-1981 — Page 100

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DESKBY 310900Z

FM PEKING 3108132 MAR 81

TO IMMEDIATE HONG KONG

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TELEGRAM NUMBER 22 OF 31 MARCH

INFO IMMEDIATE FCO

FOR GOVERNOR AND PRIVATE SECRETARY

SECRETARY OF STATE'S VISIT: FUTURE OF HONG KONG

1. ASSISTANT FOREIGN MINISTER SONG ZHIGUANG TODAY GAVE AN INTERVIEW TO IAN MACKENZIE, THE OUTGOING REUTERS CORRESPONDENT HERE, IN WHICH SONG SPOKE INTER ALIA ABOUT THE FORTHCOMING VISIT OF THE SECRETARY OF STATE AND IN PARTICULAR ABOUT THE FUTURE OF HONG KONG.

2. ACCORDING TO MACKENZIE, SONG SAID THAT THE PROBLEM OF HONG KONG AND THE NEW TERRITORIES COULD BE SETTLED THROUGH FRIENDLY CONSULTATIONS BUT IT WAS TOO EARLY TO SAY WHAT THE OUTCOME WOULD BE AS 1997 WAS STILL 16 YEARS AWAY. CHINESE LEADERS HAD ALREADY SAID ON MANY OCCASIONS THAT THEY RESPECTED THE INTERESTS OF INVESTORS. WHEN THE PROBLEM WAS SETTLED INVESTORS' INTERESTS WOULD NOT BE HARMED.

3. SONG SAID THAT THE HONG KONG ISSUE FELL INTO TWO PARTS, FIRST TERRITORY CEDED UNDER UNEQUAL TREATIES WHICH CHINA HAD NEVER RECOGNISED AND SECOND TERRITORY WHICH HAD BEEN LENT (SIC) TO BRITAIN UNTIL 1997, AGAIN UNDER AN UNEQUAL TREATY.

4. SONG REFERRED TO MACAO, SAYING THAT THE PORTUGUESE GOVERNMENT RECOGNISED CHINA'S SOVEREIGNTY OVER MACAO AND YET CHINA HAD CHOSEN NOT YET TO TAKE BACK THE TERRITORY.

5. ASKED WHETHER THESE COLONIAL REMNANTS WERE EMBARRASSING TO CHINA, SONG SAID THAT THEY WERE A LEGACY OF HISTORY WHICH WOULD BE SETTLED IN TIME. THE SOVIET UNION WAS TRYING TO SOW DISSENSION BUT CHINA WAS NOT VERY IMPATIENT TO SETTLE THIS ISSUE. THE MOST IMPORTANT TASK WAS TO RESIST SOVIET EXPANSIONISM. THE PROBLEMS OF HONG KONG AND MACAO WERE IN FACT 'VERY MINOR''.

6. SONG SAID HE DID NOT KNOW YET WHETHER LORD CARRINGTON WOULD WANT TO DISCUSS HONG KONG. IF HE DID HUANG HUA WOULD SAY NO MORE THAN HE (SONG) HAD JUST SAID.

7. MACKENZIE WILL BE REPORTING TODAY TO HIS AGENCY. I ENCOURAGED HIM TO PRESENT IT AS ANOTHER ENCOURAGING SIGNAL FROM CHINA.

CRADOCK

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SIR E YOUDE MR DONALD

MR PH MOBERLY CABINET OFFICE