TNAG-1167-FCO40-1447-Future-of-Hong-Kong-1982 — Page 133

7.

D, E

W

DSR 11C

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Kong problem;

-2-

c) The Lord Privy Seal has visited China, Japan and

Hong Kong and has discussed with the Chinese Hong

Kong's future as well as the Prime Minister's visi

$

4. From the discussions the Lord Privy Seal held with th

Chinese leadership (Peking Telnos 17 and 18 refer). it is

clear that while they have not moved on essentials the

Chinese are aware that Hong Kong's future is an important

question, and they are now focusing on it. Premier Zhao

assured the Lord Privy Seal that the problem would not

be shelved until 1997 and that in due course the Chinese

would discuss it with 'Hong Kong circles' and the British

side. The Chinese told the Lord Privy Seal that they

wanted to see Hong Kong remain a free port and a commerci

and financial centre..

5. In some ways the latest Chinese attitude is encouragi

They have gone rather further than before in recognising

the need to maintain confidence and have been more forth-

coming about their consideration of the problem. They ha

not, however, put forward any concrete proposals and, giv

the extreme political complexity of the question, may sti

take a very long time to come up with anything definite.

The other significant point, to which Sir P Cradock draws

attention in his Telno 22 of 12 January, is that their

hints of their thinking, so far as they go, suggest that

they would like a solution which brought Hong Kong clearly

under Chinese sovereignty although with a degree of econon

and other autonomy. Premier Zhao Ziyang's emphasis on the

Taiwan analogy underlines this. It is true that the Chine

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/proposals