TNAG-1041-FCO40-1291-Future-of-Hong-Kong-1981 — Page 114

4RS 750 SECRET

DESKBY 0109 38Z

SECRET

FM HONG KONG Ø10850Z DECEMBER 81

TO IMMEDIATE F C O

TELEGRAM NUMBER 1073 OF 01 DECEMBER

INFO ROUTINE PEKING

MY TELNO 1054: FUTURE OF HONG KONG

(244)

704

INDEX

HIR oye ||

2 DECIDEN

(248) 1. I AGREE GENERALLY WITH THE AMBASSADOR'S COMMENTS ON

DRAFT O D PAPER IN PEKING TELNO 703 SUBJECT TO THE FOLLOWING POINTS (THE REFERENCES ARE TO PARAGRAPH NOS IN PEKING T U R):

(1) PARA 1A. I MUCH PREFER SIR P CRADOCK'S REVISED VERSION

pano diz

OF THE SECOND SENTENCE OF PARAGRAPH 1 OF THE DRAFT. I SHOULD seen2014

ALSO LIKE TO SEE THE SECOND HALF OF THE PARAGRAPH AMENDED TO READ: QUOTE... WILL EXPIRE IN 1997. MEANWHILE CONCERN ABOUT THE FUTURE IS GROWING IN HONG KONG. WHEN CONFIDENCE FALTERS IT COULD SLIDE QUICKLY, LEADING EVENTUALLY TO A FINANCIAL COLLAPSE WHILE RESPONSIBILITY STILL RESTED SQUARELY. WITH HMG AND THE HKG. THIS WOULD CREATE MAJOR PROBLEMS FOR HMG AND WOULD NECESSITATE IMMEDIATE NEGOTIATIONS WITH THE CHINESE TO AGREE ARRANGEMENTS TO RE-ESTABLISH CONFIDENCE. IN THE ABSENCE OF SUCH ARRANGEMENTS HONG KONG

MIGHT NOT REMAIN GOVERNABLE FOR VERY LONG UNQUOTE.

(II) PARA 1B. I AGREE. MY PROPOSED REDRAFT AT (1) ABOVE COVERS THE AMBASSADOR'S POINT ABOUT THE FIFT SENTENCE OF PARA 1. PARA 2(A) OF THE DRAFT MIGHT BE AMENDED: QUOTE IF NO ACTION IS TAKEN CONCERN ABOUT THE FUTURE IN HONG KONG WILL PROBABLY COME TO A HEAD BY 1985. IT COULD BE AS EARLY

AS 1982 UNQUOTE.

(111) PARA 1C. A BRIEF REFERENCE TO THE RELEVANCE OF TAIWAN TO THE FUTURE OF HONG KONG IS NEEDED SOMEWHERE IN THE PAPER. THIS COULD BE INCORPORATED IN THE NEW SENTENCE PROPOSED BY SIR P CRADOCK: QUOTE OUR JUDGMENT BASED ON CONTACTS WITH THE CHINESE OVER THE LAST FEW YEARS, AND RECENT CHINESE STATEMENT ON TAIWAN, IS THAT .. UNQUOTE.

...

(IV) PARA 1D. I ENTIRELY AGREE WITH THE AMBASSADOR'S COMMENT, BUT I THINK THE POINT NEEDS TO BE BROUGHT OUT EVEN MORE CLEARLY BY EXPANDING HIS REDRAFT: QUOTE OUR AIM IN BEING PREPARED TO RENOUNCE IN THE NEAR FUTURE AND BEFORE 1997, WOULD BE TO END UP EITHER (UNDERLINED) WITH AN ASSURANCE OF THE CONTINUATION OF A SEPARATE HONG KONG UNDER BRITISH ADMINISTRATION, THUS PREVENTING A SLIDE IN CONFIDENCE OR, (UNDERLINED) AT THE LEAST, CHINESE ACQUIESCENCE IN AN AMENDMENT TO THE ORDER IN COUNCIL OF 1898 WHICH WOULD REMOVE THE PRESENT CERTAINTY THAT BRITISH ADMINISTRATION WILL END

IN 1997 UNQUOTE.

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