TNAG-1156-FCO40-1436-Visits-by-FCO-Ministers-to-Hong-Kong-1982 — Page 130

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MRR 04 CONFIDENTIAL

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CONFIDENTIAL

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RECORD OF A CALL BY THE AUSTRALIAN HIGH COMMISSIONER ON. THE

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LORD PRIVY SEAL : FRIDAY 22 JANUARY 1982

Present:

Hy wil £2.250

Millc Quate

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The Rt Hon Humphrey Atkins MP

Mr R D Clift

Mr C P Burdess

Mr MA Arthur

Sir Victor Garland KBE Mr R H Robertson

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Lord Privy Seal's visit to Hong Kong and problem of the Future

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The High Commissioner asked for the LPS's impressions. Mr Atkins said, that he had been very struck by the rate of development in Hong Kong, particularly in the New Territories. The approaching problem of 1997 was increasingly discussed but he did not believe that it was yet having a serious effect on confidence. There were investors who needed to obtain a long-term return on their capital but who were still going ahead with projects in the Territory. Of course people in Hong Kong wanted more certainty about the future but there was no sign of an economic downturn. Cooperation with the Chinese Special Economic Zones across the border was good and was being encouraged by a more flexible attitude on the. Chinese side.

2. The High Commissioner asked whether the Chinese had any definite formula for solving the problem. Mr Atkins said that China was adopting an open door policy and encouraging business particularly through Shanghai. As regards the future, he had not seen Deng Xiaoping, but had a discussion with Premier Zhao Ziyang. It was clear that the Chinese had now realised that they must face up to the problem and were ready to move beyond the 'hearts at ease' formula. They recognised the need to take account of Hong Kong's position as a free port and commercial centre. However he did not think that the Chinese had yet made up their minds about a solution. For our part we had pointed out the need to preserve confidence and no doubt influential Hong Kong Chinese had done the same.

Impressions of China

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In answer to a question from the High Commissioner, Mr Atkins emphasised the striking differences between Peking and Shanghai and the greater economic realism shown by emphasis on light as opposed to heavy industry. This was coupled with greater awareness of consumer demand. The other striking point had been the damaging effect of the Cultural Revolution on the education of the generation of the late 60s and early 70s.

General Foreign Policy Points

4. The High Commissioner asked whether there had been much discussion on Kampuchea. Mr Atkins said this had not been covered in detail. In general, Chinese foreign policy remained based on their dislike and fear of the Soviet Union. Their interest in developments in Europe, both West and East, was primarily motivated by this consideration.

CONFIDENTIAL

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