TNAG-1040-FCO40-1290-Future-of-Hong-Kong-1981 — Page 174

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PAPER ON THE FUTURE OF HONG KONG

19/10

..anange & coordination of 8/16/1 funter action.

Thank you for sending me, with your letter of 2 September, the latest draft of the paper on the future. I think it is now a good paper. Comments on a few points of detail are attached. The only substantial alteration is to suggest expanding the reference to Taiwan. Deng made it clear to Lord Carrington in April that we should watch the parallel closely. I think we need an appendix (to be kept up to date) on Chinese Policy towards Taiwan. The essentials are probably there in the statement of 30 September but there may be additional points to add if we have the promised major speech on 9 October.

2.

You say you will prepare a summary of the paper for Ministers. I have tried my hand at something which is less of a summary than an outline of the problem with recommended courses of action for the near future. I suggest that something of this sort, taking account of any comments which Percy Cradock may have, should be put to Ministers for their approval.

3.

One point which comes out clearly in this exercise is the need for thorough contingency planning on the legal side. The likelihood is that any solution acceptable to the Chinese will involve, in some form, relinquishing sovereignty. Both options C and D in the paper refer to the need to work out the legal implications. I suggest we get on with this.

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A E Donald Esq CMG

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