TNAG-1040-FCO40-1290-Future-of-Hong-Kong-1981 — Page 86

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DSR 11C

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not prepared and we might miss out on the opportunity of the

Prime Minister's visit.

12. In fact these differences are not serious because there

will be a number of events which should in any case provide

a natural sequence for contact with the Chinese. The first

is the visit by the Lord Privy Seal in January 1982. Since

this is to be a familiarisation visit, he could seek

clarification of Chinese views and explain our own concerns

in detail. If they appeared receptive he could underline the

need for the Prime Minister's visit to produce some tangible

steps forward.

13. Another opportunity will be the discussions which the

Ambassador in Peking will need to have on the programme and

agenda for the Prime Minister's visit.

14. If, on either occasion, the Chinese are reasonably

receptive, it might be possible to sound them out on the

analogy between the Taiwan and Hong Kong situations and to

hint that we would be ready to discuss something on similar

lines.

15. During the Prime Minister's visit itself the first

priority would be to get a more positive statement out of the

Chinese. It would be helpful if this could include some

undertaking to discuss the issue with HMG. But this would

need to be played by ear at the time.

Legal Problems

16. The legal implications for HMG of the options in the

contingency paper, including a possible technical

renunciation of sovereignty, will be covered in a separate

submission.

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/Future Action