visits China in the second half of 1982, we should consider nearer the time whether she should try to get things started. If so the objective should be to get from the Chinese (preferably Deng personally) agreement to a joint and secret examination of the problem of Hong Kong's medium term future. In order to use the Prime Minister's visit to full effect we would need to prepare the ground by giving the Chinese at least 2 months
notice, supported by some carefully controlled hints through
intermediaries.
9. Meanwhile, we need to know the legal implications of a change in the status of Hong Kong from British sovereign territory to Chinese territory administered by Britain. We should work out in advance what corrective legislation would be required to preserve Hong Kong's position in e.g. international agreements, as well as whatever legislation would be required, e.g. Act of Parliament, for a change in status. It is essential that this work should be done secretly.
8th October 1981
SECRET
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