TNAG-1041-FCO40-1291-Future-of-Hong-Kong-1981 — Page 19

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PP HONG KONG

GRS 480

SECRET

FM FCO 211735Z DEC 81

TO PRIORITY HONG KONG

TELEGRAM NUMBER 975 OF 21 DEC

SECRET

42170

1

HKK 040

RECEIVED IN RECREERY #G. '51

1 DEC 1981

DESK OFFICER

INDEX

*A

आल

Acuns Taken

311.2/ Af-31/12

AND TO PRIORITY PEKING (PERSONAL FOR AMBASSADOR)

PERSONAL FOR GOVERNOR AND POLITICAL ADVISER FROM CLIFT

MIPT

LINE WITH CHINESE LEADERS

1. RECALL LORD CARRINGTON'S DISCUSSION WITH CHINESE LEADERS IN

APRIL. GLAD RELATIONS OVER HONG KONG ARE SO GOOD. VALUE

PRACTICAL COOPERATION WITH GUANGDONG.

2.

AS LORD CARRINGTON EXPLAINED, WE FACE A LEGAL PROBLEM OVER

1997. THE FUTURE IS A SUBJECT OF GROWING DISCUSSION IN HONG KONG

AND UNCERTAINTY IS BOUND TO AFFECT CONFIDENCE. WE HAVE A COMMON

INTEREST IN BOLSTERING CONFIDENCE AND WOULD BE GRATEFUL FOR ANY

VIEWS THE CHINESE MAY HAVE ON WAYS OF DOING THIS.

3. (DEPENDING ON CHINESE RESPONSE) CONCERN OVER THE FUTURE IS

GROWING. CHINESE ASSURANCES HAVE BEEN OF GREAT VALUE.

BUT THE LEGAL AND OTHER PROBLEMS RELATING TO 1997 REMAIN.

LOCAL AND OVERSEAS INVESTORS (INCLUDING LAWYERS AND ACCOUNTANTS) ARE

PARTICULARLY INTERESTED IN ENSURING CONTINUING STABILITY

IN MATTERS AFFECTING HONG KONG. SHOULD AIM TO ACHIEVE

THIS WITHOUT PREJUDICING CHINA'S POSITION ON HONG KONG. OTHER-

WISE COULD BE RAPID DISPERSAL OF CAPITAL AND INDUSTRIAL RESOURCES

OF HONG KONG WITHIN NEXT FEW YEARS.

(PROVIDED THAT PRIME MINISTER'S VISIT HAS BEEN AGREED)

THERE WILL BE A FURTHER OPPORTUNITY FOR DISCUSSION OF THE

QUESTION WHEN THE PM VISITS PEKING.

5. (IF CHINESE REPEAT ASSURANCES) WE ACCEPT THESE. PROBLEM IS

THAT PUBLIC OPINION AND INVESTORS IN HONG KONG MAY NOT, WHILE

FACED WITH UNCERTAINTY ABOUT FUTURE LEGAL ARRANGEMENTS.

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