TNAG-1167-FCO40-1447-Future-of-Hong-Kong-1982 — Page 110

CODE 18-77

Mr Davies

SECRET

HKK

"

Reference

040/1

64

1187/284023/2

1. I think the attached piece on China's policy on Taiwan requires some amendment to take account of developments since it was written last year.

2. Paragraphs 1 and 2 seem to be all right but paragraph 3 might be amended to indicate more clearly China's attitude to future arms supplies to Taiwan. The Chinese are now insisting that the Americans end all arms sales within an agreed time limit. This has important implications for the question of sovereignty which is of course a key issue of Chinese policy towards both Taiwan and Hong Kong.

3. I believe that the Chinese want to suggest that they view the settlement of the Hong Kong question generally along the same lines they have proposed for settlement of the Taiwan question. Premier Zhao indicated to the LPS during his recent visit that HMG could get some idea of the Chinese attitude to Hong Kong from the 9 Point Plan on Taiwan. We should therefore amend paragraph 5 to take account of:

4.

(a) what was said to the LPS on the subject; and (b) other indications we have had about current Chinese thinking on the acceptance of sovereignty while at the same time maintaining the status quo in both places.

Rightly or wrongly, I was under the impression that a solution of the Taiwan question has in Chinese eyes a more urgent priority than a solution of the Hong Kong one; and also that proposals to achieve the former could be regarded as relevant to a subsequent solution of the latter. If this is so, the last sentence in

paragraph 6 would seem to put the cart before the horse and should perhaps also be amended.

15 February 1982

SECRET

Algha

RE Coghlan