TNAG-1166-FCO40-1446-Future-of-Hong-Kong-1982 — Page 47

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TELELITTER

FROM SIP MURRAY MACLEHOSE, GOVERNOR, HONG KONG

DATED 1 FEBRUARY 1982

FOLLOWING FOR R D CLIFT, ESC, HKGD, FCO

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COPIED

SIR P CRADCCK KCMG, PEKING

FUTURE OF HONG KONG

144011/2

I SUGGEST THE NEXT STEP IS TO GET THE CHINESE TO ACCEPT THAT

IF THERE IS TO BE SOME NEW ARRANGEMENT IN THE COMPARATIVELY MEAR FUTURE, AS THERE MUST BF, CHINESE ADMINISTRATION OF HONG KONG

MOLLD NOT BE CO 'PATIBLE WITH

THOUGH IT MIGHT

BECOME SO AT SOME MORE DISTANT DATE. IT WILL BE DIFFICULT FOR THE TO ACCEFT THAT FOR THE TIME BEING THEY COULD NOT RUN THE PLACE

AS WELL AS WE CAN.

2. AGAINST THIS BACKGROUND MY PRINCIPAL COMMENT ON THIS

ADMIRABLE TELEGPAY IS ON FARA 7:

(1) E SHOULD USE INFORMAL CONVERSATION, AND HONG KONG BUSINESSMEN, TO GET THE CHINESE TO CONSIDER THE IMPLICATIONS OF

THE IMPORTANCE OF HONG KONG AS A FREE PORT AND A COMMERCIAL

AND FINANCIAL CENTRE. THE LAATTER

EBCUND UP WITH LAW, CLARENCY,

} }

AND AD ISTRATION DIFFERENT TO THOSE IN CHINA. IF IT BECAME

PART OF THE FMS ZONE CHINA WOULD HAVE TO FOREGU MONG KUNG'S

VALUE AS A SOURCE OF FOREIGN EXCHANGE OR AS A FINANCIAL CENTRE.

MOREOVER THEFE IS THE PROBLEM OF WHAT ACCESS RIGHTS HONG KONG'S

INDUSTRY WOULD ENJOY IN THEIR PRESENT MARKETS IF HONG KONG

BECAME CHINESE. WHILE ALL THESE POINTS ARE SUBSUMED IN THE

AMBASSADOR'S PHRASE "WE MUST MAKE EVERY EFFORT TO EDUCATE THE

CHINESE AS TO WHAT THE CONCEPT OF INVESTOR CONFIDENCE'' INVOLVES'',

I SUSPECT THE CHINESE HAVE LARGELY CONCENTRATED ON THE ISSUE OF TE

AND THE CONFIDENCE OF LAND DEVELOPERS, AND HAVE MOT FOCUSED ON THESE OTHER MORE FUNDAMENTAL ISSUES. THEY ARE NOT RIFE

FORMAL DISCUSSION, BUT IT IS TIME THEY WERE BROACHED INFORMALLY. (11) WITH REGARD TO THE PM'S VISIT, I AM SURE THAT ALL PREPARATORY WORK SHOULD LE DONE TO ENABLE HER IF, REPEAT IF,

CHE FEILS THE TIME RIGHT, TO ERCACH THE QUESTION OF SOVEREIGNTY. AS THE AMBASSADOR HAS FOINTED OUT ELSEWHERE, THERE IS JUST A CHANCE

THAT LACK OF RESPONSE TO THE NINE-POINT TAIWAN PROGRAMME, COUPLEL

WITH CONTINUED U S SUPPORT FOR TAIWAN MIGHT ATTRACT THE CHINESE

བ ས པ ས ད ད ད ག པ ག ག པས ག པ པ ག ག པ ག ག པS

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