CONFIDENTIAL
ESSENTIAL FACTS
FUTURE OF HONG KONG
1.
The Secretary of State knows the problem. The Lord Privy Seal
talked to the Chinese about it in January. They said they would think
about it. Important that Sir Y K Pao, who has access to Chinese
leadership, should not get impression that HMG consider him to be an
intermediary with them on this problem. Also that Sir Y K and Hong
Kong residents do not expect Prime Minister's visit to China in
September to lead to immediate solution. Expectations of visit are
growing in Hong Kong. May be pitched too high with consequent later
drop in confidence.
VISIT OF VICE PREMIER GU MU
2.
Sir Y K has been pushing for a renewed invitation from HMG to
Gu Mu to visit the UK. Invitation, renewed by Mr Rees in December 1981
and by the Lord Privy Seal in January, is with Chinese. Sir Y K wants
Madame Gu to launch one of his British-built ships in May. But Gu Mu
may prove to be a victim of current pruning of Chinese Government
machinery. Some of his functions have been transferred away from him
(Import-Export Commission and Foreign Investment Commission subsumed
in new Foreign Trade Ministry). Sir'Y K's cousin, and intermediary with
Gu Mu, Lu Xu-zhang has lost his position as a Vice-Minister (probably
on age grounds). Gu Mu's own future remains unclear.
3.
Sir Y K raised with the Prime Minister on 12 March the question
of the invitation to Gu. Given the uncertainties surrounding Gu's
prospects we still prefer not to reiterate the invitation too
importunately.
The Chinese are fully aware of the invitation and it
is for them to decide when to take it up.
CONFIDENTIAL
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