TNAG-1167-FCO40-1447-Future-of-Hong-Kong-1982 — Page 23

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ANNEX A

IMPLICATIONS FOR HONG KONG OF CHINA'S POLICY ON TAIWAN

1.

The leaders of the People's Republic of China have set their sights on achieving the take-over of Taiwan in such a way as to ensure the maximum benefit and the least possible damage to China's interests. While they do not rule out the use of force as

a last resort they express hope that reunification can be achieved peace- fully through negotiations between themselves and the leaders of ruling Kuomintang (Nationalist) Party on Taiwan.

2.

The essence of China's proposals on Taiwan (put forward on several occasions in the last 3 years) is that in return for accept- ance by the Taiwan authorities of unification, China would respect the status quo' on Taiwan and adopt reasonable policies and

measures so as not to cause any losses to the people on Taiwan' China says that it would allow Taiwan to retain its own armed forces, would abstain from interference in the local affairs of the island, would leave Taiwan's 'socio-economic system' unchanged, with 'no encroachment' on the investments and rights of inheritance enjoyed by the inhabitants, and would permit Taiwan businessmen to invest on the mainland. These points were reaffirmed in a 9-Point Proposal on 30 September 1981 by Ye Jianying (China's equivalent to Head of State), who added that under the arrangements envisaged by Peking

'people in authority' from Taiwan could assume national leadership posts and 'participate in running the state'.

3. On some previous occasions, Chinese officials had said that authorities on Taiwan would have to give up the use of such attributes of national status as the 'Republic of China' flag, but China has not explicitly repeated this in its latest statements. On the question of further arms supplies for Taiwan after a settle- ment there have been conflicting reports on China's attitudes. Some officials have suggested that these would be 'negotiable' but others have said that they would not be permitted. In any case the issue has been recently subsumed in China's strong opposition to continued US arms sales to Taiwan.

4.

The comparison between China's position on Taiwan and that on Hong Kong was originally drawn by Deng Xiaoping in conversation with the Governor in March 1979. He said that the UK would be aware of China's policy on Taiwan; that on its return to China there would be 'no change in the social system, nor would living standards be affected. Taiwan could still enjoy a special status and local autonomy and even her own armed forces, even though she would be part of China. There could never be two Chinas or one and a half Chinas. This was the Chinese position on Hong Kong and Macao as well as on Taiwan. This was a long-standing policy. They had adopted it because they needed Hong Kong'.

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