TNAG-1155-FCO40-1435-Visits-by-Members-of-Parliament-(MPs)-to-Hong-Kong-1982 — Page 294

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CONFIDENTIAL

CALL BY THE RT HON DR DAVID OWEN MP 19 AUGUST:

FUTURE OF HONG KONG

POINTS TO MAKE

1.

Understand you will be touching on Hong Kong's future in a

speech in Hong Kong. Some background information might be helpful.

Very complex and sensitive question. Both we and Chinese actively

studying, particularly since Mr Atkins' visit in January.

2.

Chinese have made it clear in recent months that they realise

need for firmer assurances if business confidence is to be

maintained.

3. But while China's economic gains from Hong Kong are great,

political inhibitions are strong in Peking, making it difficult for

them simply to acquiesce in the continuation of the status quo.

They appear to find it hard to accept that confidence is dependent

on British administration, the legal system and independent

convertible currency. They are also making a strong pitch for

their sovereignty over the whole territory to be recognised.

PRIME MINISTER'S VISIT

4. Future expected to be discussed during visit to China.

Continuing process, to build on Mr Atkins' discussions and to take

things further. Wrong to expect solution then but we are conscious

of the need to reach and make public an acceptable settlement soon.

We think it must provide for continuation of effective British

administration.

5.

Hong Kong opinion very important and interests of the people

must be taken into account. Hong Kong Government are monitoring and

we are giving thought to this. Group of Unofficials to come here

in September to make known their views.

/Hong Kong Stock

CONFIDENTIAL