TNAG-1040-FCO40-1290-Future-of-Hong-Kong-1981 — Page 52

DSR 11C

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Kachies handling problem

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SECRET

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Our aim in renouncing sovereignty before 1997 would be to end

up with a better assurance of the continuation of a separate

Hong Kong under British administration, while removing the

risk that a crisis of confidence might force us out at

short notice. Any change of sovereignty would require an

Act of Parliament. We would need to ensure that the arrange

ment preserved the essential elements of Hong Kong's separate

existence including provisions on citizenship which reassured

the population.

4.

Clearly we should not make a premature offer to the

Chinese on sovereignty. But we should be prepared to discuss

This

the possibility when they are ready to negotiate.

point may not be reached by the time of the Prime Minister's

visit to China (provisionally planned for next September).

But she should have the fullest latitude in discussion.

5. In any case we shall need to give the Chinese advance

notice of our concerns without putting forward any specific

proposals that they might feel obliged to reject in advance.

The Lord Privy Seal's visit in January 1982 would provide an

opportunity to probe theChinese on their latest thinking.

Also, when our Ambassador in Peking discusses the agenda for

the Prime Minsiter's visit with the Chinese Government, he

will be able to emphasise the Prime Minister's interest in the

problem.

6.

Ministers are asked to approve the contingency paper as

a guide to discussion with the Chinese and to agree that if

necessary a concession on sovereignty over Hong Kong should

not be ruled out in order to obtain bankable assurances from

Peking.

Foreign and Commonwealth Office

[date]

SECRET