TNAG-1160-FCO40-1440-Visit-by-Margaret-Thatcher--UK-Prime-Minister--to-Hong-Kong--1982 — Page 81

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FM PEKING 130204Z AUG 82

TO PRIORITY FCO-

TELEGRAM NUMBER 443 OF 13 AUGUST

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INFO PRIORITY HONG KONG (PERSONAL FOR GOVERNOR)

FOR DONALD

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PRIME MINISTER'S VISIT TO CHINA

1. ALTHOUGH WE HERE HAVE NOT RECENTLY BEEN INVOLVED IN ANY ACTIVITY CONCERNING THE FUTURE OF HONG KONG, I HAVE SEEN REPORTS INDICATING

· THAT CHINESE THINKING HAS BEEN HARDENING WITH REGARD TO THE

'RESUMPTION OF SOVEREIGNTY BY 1997. THERE HAVE BEEN TWO LOCAL INDICATIONS THAT THE CHINESE ARE NOT TROUBLING TO KEEP THE MOST IMPORTANT FEATURES OF THEIR THINKING VERY SECRET: THE AFP CORRESPONDENT HAS TOLD ME THAT FEI YIMIN TOLD HIM AFTER MEETING DENG THAT THE CHINESE WANTED SOVEREIGNTY, BUT NO CHANGE IN THE CURRENCY''., AND MY BELGIAN COLLEAGUE HAS BEEN TOLD BY A MEMBER OF WED, MFA IN UNEQUIVOCAL TERMS THAT CHINA INTENDS TO RESUME

SOVEREIGNTY IN 1997.

2. THESE TWO CHINESE LEAKS SHOW THAT WE COULD BE FACED WITH SOME SIMILAR, OR WIDER, INDISCRETIONS FROM THE CHINESE AT ANY TIME BEFORE MRS THATCHER COMES, OR WHILE SHE IS HERE. I SHOULD LIKE TO CONSULT YOU ABOUT MY FEELING THAT (UNLESS THE DEVELOPMENTS IN PARA 1 ARE ALL PART OF AN OPENING NEGOTIATING POSITION, WHICH I DOUBT) THEY DO NOT MAKE THE PROSPECTS FOR THE FIRST STAGE IN SEPTEMBER OF AN ALREADY DIFFICULT NEGOTIATION ANY EASIER.

3. SUBJECT TO YOUR VIEWS, THEREFORE, I THINK WE SHOULD NOW MAKE REDOUBLED EFFORTS, IN BOTH PUBLIC AND PRIVATE PREPARATION FOR MRS THATCHER'S VISIT, TO BUILD UP ITS POTENTIAL BILATERAL SINO-BRITISH! CONTENT. OF COURSE THE HK PROBLEM WILL ALWAYS BE THE SINGLE MOST IMPORTANT PROBLEM TO BE DISCUSSED, BUT IT MIGHT BE OF OVERALL ADVANTAGE FOR PUBLIC CONSUMPTION TO GIVE MORE CONTENT TO THE UNCONTROVERSIAL BILATERAL SIDE OF THE BALANCE SHEET.

4. IT MAY BE HELPFUL TO SUMMARISE WHAT IS IN THE BILATERAL BASKET