TNAG-1040-FCO40-1290-Future-of-Hong-Kong-1981 — Page 15

GR 680

S ECRET

FM PEKING 230720Z NOV 81

TO IMMEDIATE F C O

TELNO 704 OF 23 NOVEMBER

SECRET

INFO IMMEDIATE HONG KONG (PERSONAL FOR GOVERNOR)

PERSONAL FOR CLIFT, HK AND GD FROM AMBASSADOR

(233

1234

YOUR TELNOS 883 AND 884 TO HONG KONG:

TOP COPY

ДНК офо

NOV1004

DANK GARC

w/3\~ Pas 11/12

FUTURE OF HONG KONG

1. I AM BROADLY CONTENT WITH THE DRAFT OD PAPER AND HAVE ONLY THE

FOLLOWING COMMENTS ON DETAILED POINTS:

A. PARA 1, SECOND SENTENCE. AS IT STANDS, THIS COULD BE READ TO MEAN THAT THE CHINESE COULD BE CONTENT TO SEE THE STATUS QUO

CONTINUE BEYOND 1997. I DO NOT THINK THAT ANY OF US BELIEVE THIS TO BE LIKELY, AND IT IS IMCOMPATIBLE WITH THE AGREED LANGUAGE OF PARA 2 OF THE CONTINGENCY PAPER. I SUGGEST A REDRAFT ALONG THE LINES OF QUOTE THE PRESENT, RELATIVELY PRAGMATIC, CHINESE ADMINISTRATION ARE AWARE OF THE GREAT ECONOMIC BENEFITS THAT CHINA DERIVES FROM HONG KONG AND HAVE PROBABLY NOT MADE UP THEIR MINDS EXACTLY WHAT TO DO ABOUT ITS FUTURE. BUT FOR POLITICAL REASONS THEY CANNOT IGNORE 1997 AND COULD NOT RISK ACQUISCING IN BRITISH

ADMINISTRATION PROLONGUED BEYOND THAT POINT WITHOUT A MAJOR POLITICAL CONCESSION ON OUR PART. HMG COULD LIVE WITH....UNQUOTE.

B. PARA 1, SENTENCE 5 AND PARA 2(A). THOUGH THIS IS REALLY FOR THE GOVERNOR TO SAY, I THOUGHT WE WERE AGREED THAT ''WITHOUT CLEAR EVIDENCE OF CHINESE ACQUIESCENCE IN CONTINUING BRITISH ADMINIST- RATION AFTER 1997, DISINVESTMENT WILL START PROBABLY BY 1985 AND POSSIBLY AT ANY TIME FROM1982 ONWARDS''. (PARAGRAPH 8 OF THE CONTINGENCY PAPER). IF WE ARE TO BE CONSISTENT, THESE TWO REFERENCES SHOULD BE STRENGTHENED ACCORDINGLY.

C. PARA 3, LINE 12. AFTER ''TECHNICAL RENUNCIATION OF SOVEREIGNTY'' YOU MIGHT INSERT A SENTENCE QUOTE OUR JUDGEMENT, BASED ON CONTACTS WITH THE CHINESE OVER THE LAST FEW YEARS, IS THAT, UNLESS WE ARE PREPARED TO MAKE THIS CONCESSION, WE ARE UNLIEKELY TO BE ABLE TO REACH ANY AGREEMENT WITH THE CHINESE OVER THE FUTURE OF THE TERRITORY (SEMICOLON) THE CONSEQUENCE OF THIS WOULD BE ECONOMIC COLLAPSE UNQUOTE. THE OBJECT WOULD BE TO MAKE IT CLEAR WE WERE NOT PROPOSING THIS MAJOR CONCESSION LIGHTLY, BUT ONLY AFTER HAVING RUN THROUGH LESSER OPTIONS.

D. PARA 3, LINES 18 AND 19. I AM UNCLEAR WHAT IS MEANT BY THIS CLAUSE. THE EFFECT OF A CRISIS OF CONFIDENCE WOULD, I THINK, NOT BE TO FORCE US OUT, BUT TO LOCK US IN IN CONDITIONS OF GREAT DIFFICULTY. I SUGGEST THAT THIS SENTENCE BE RECAST TO READ QUOTE OUR AIM IN BEING PREPARED TO RENOUNCE BEFORE 1997 WOULD BE TO END UP WITH AN ASSURANCE OF THE CONTINUATION OF A SEP AR ATE HONG KONG UNDER BRITISH ADMINISTRATION AND PREVENT A SLIDE IN

CONFIDENCE UNQUOTE.

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