TNAG-1168-FCO40-1448-Future-of-Hong-Kong-1982 — Page 29

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Mr. McQuade

Mr. Willington J 123.

Erlin

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PEKING T L

OR 660

CONFIDENTIAL

TELELETTER

FROM J S WHITEHEAD TOKYO

I have

dufted

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040/

DATED 18 MARCH 1982

FOLLOWING FOR A E DONALD ESQ CHG, FCO

See/155,

162B

COPTED TO SIR PERCY CRADOCK PCKING AND K J T MCLAREN IN HONGKONG

(ACTIONED)

JAPANESE INTEREST IN THE FUTURE OF HONG KONG

1. IN THE COURSE OF A SESSION JEVOTED TO ASIAN MATTERS

DURING THE PLANNING TALKS WHICH CHRISTOPHER MALLABY IS HAVING HERE WITH THE JAPANESE FUJII, DEPUTY DIRECTOR OF THE ASIAN AFFAIRS BUREAU, RAISED THE QUESTION OF THE FUTURE OF HONG KONG.

2. IN PARTICULAR HE ASKED WHETHER THERE WAS ANYTHING THAT

JAPAN COULD USEFULLY DO DISCREETLY. HE ACCEPTED THAT THIS WAS A VERY SENSITIVE SUBJECT AND THAT AT THE PRESENT MOMENT THERE WAS PROBABLY LITTLE OR NOTHING THAT JAPAN COULD OR

SHOULD DO. HOWEVER, THERE WERE AN INCREASING NUMBER OF JAPANESE INVESTORS IN HONG KONG WHO WERE APPROACHING THE

JAPANESE GOVERNMENT TO ASK FOR A STEER ON HONG KONG'S FUTURE AND WHETHER THEY SHOULD START OR CONTINUE TO INVEST THERE. FUJI SAID THAT THE SENERAL JAPANESE GOVERNMENT LINE WAS TO CONTINUE TO ENCOURAGE SUCH INVESTMENT. HE MADE IT CLEAR THAT HE WAS RAISING THIS MATTER INFORMALLY: BUT HE WONDERED WHETHER IN DUE COURSE IT MIGHT NOT BE POTENTIALLY HELPFUL TO BOTH SIDES FOR THERE TO BE QUIET, INFORMAL EXCHANGES OF VIEW BETWEEN THE DITISH AND THE JAPANESE.

3.

CHRISTOPHER MALLABY REPLIED THAT THIS AS OF COURSE A SUBJECT TO WHICH THE SRITISH HAD GIVEN CONSIDERABLE THOUGHT. IT WAS INEVITABLE THAT THE SUBJECT SHOULD ATTRACT MORE INTEREST AT ABOUT THIS TIME IN VIEW OF THE 1997 LEASE DATE

YEAR AND THE TRADITION IN HONG KONG OF 15 PROPERTY LEASES. THERE WERE ALSO INVETIABLY WAVES OF SPECULATION IN THE MEDIA ABOUT THE FUTURE OF HONG KONG PARTICULARLY AT TIMES OF VISITS BY EG BRITISH MINISTERS TO HONG KONG OR CHINA. BUT IN PRACTICAL TERMS IT WAS NOT YET CLEAR WHAT MIGHT EMERGE FROM THE BRITISH THINKING TO WHICH HE HAD REFERRED OR WHEN. THERE WAS THEREFORE NOTHING THAT HE COULD SAY AT THIS TIME.

HOWEVER, TAKE NOTE OF FUJII'S INFORMAL SUGGESTION.

ME WOULD,