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It seems to us that we might be able to negotiate with the Chinese a satisfactory solution to the Hong Kong problem which could at the same time be helpful to China over Taiwan.
10. The attraction of speaking in this way to the Chinese is that it builds on the somewhat delphic statements made by the Chinese themselves. Furthermore, if the Chinese are in something of a hurry over Taiwan, as we believe they are, we might make use of it to concentrate their minds more urgently on our problem, which they presently do not appear to regard as pressing.
11. I should stress that I would not envisage Mrs Thatcher going into detail on the kind of concessions we might be able to make, particularly in advance of any information on the kind of quid pro quo that might be forthcoming. I would only suggest that the existence of the paper, presumably agreed by Ministers, should put her personally in a better position than the Secretary of State was in April to take matters further.
12.
Obviously everything would depend on the Chinese response to this hint of movement on our part. We should in any case want from them a more forthcoming public statement and, if possible, an arrangement for confidential talks on arresting a slide in confidence. But if they showed interest, we could go beyond that, to substantive talks on the future. To avoid misunderstanding I should add that I do not rate the chances of achieving any of these objectives as good; but, if we accept the argument for the Prime Minister's visit, we have to try to get further than we were able to do in April. A mere repeat performance would be dangerous.
13.
You asked about the way in which we might approach the Chinese if confidence in Hong Kong began to slide. As I have suggested above, this is something we might perhaps try to establish during Mrs Thatcher's visit. However, should that be unsuccessful or should the need for an approach arise before September 1982, I think that we should act simultaneously with the MFA here and the Embassy in London. I would envisage a message from the Foreign Secretary or, preferably, the Prime Minister. I would expect to be able to deliver it to Huang Hua; a copy should also be delivered to the Chinese Ambassador in London. The further detail of instructions would depend upon the circumstances at the time.
neer
Yours
Race
PERCY CRADOCK
CC: Sir Murray MacLehose GBE KCMG KCVO
Governor, Hong Kong
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