4.
Relations between Britain and China are very good.
Hong Kong's contacts with the Chinese are relaxed and easy and
there is much co-operation between Hong Kong and the neighbouring
Chinese province of Guangdong on matters of mutual interest.
5.
Hong Kong is the source of some 40% of China's foreign
exchange earnings. There are substantial Chinese investments
there.
6.
Both the British and the Chinese are agreed on the vital
importance of Hong Kong's continued prosperity and stability.
They are studying the question of the future of the territory,
which will be one of the subjects discussed when the Prime
Minister visits Peking in September 1982.
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