TNAG-1169-FCO40-1449-Future-of-Hong-Kong-1982 — Page 102

CONFIDENTIAL

1162,

See 1156

Mr GKft

cc:

PS/LPS

Mr Giffard

Mr Elliott

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04011

FUTURE OF HONG KONG

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Mr Killimon The spoke. We ond

a) send copies to the Governmen

(under a letter)

b) submit reply to hd. Shepheut litter ĥ LPS.

Pl.dp.

1. Lord Shepherd telephoned me yesterday afternoon. He

explained that he had accepted advice from the Lord Privy Seal about dealing with Mr Fung King-hey. The gist of this was

that it was important to avoid raising expectations in Hong

Kong about the Prime Minister's visit to China. While it was

important to avoid getting involved in issues of substance, it

was quite right for Chinese businessmen like Mr Fung to

remind the Chinese of the need for confidence in Hong Kong and

to explain the technical workings of the Hong Kong market. Lord Shepherd said that he had dutifully dampened down Mr Fung's ardour and got his additional co-operation.

2. He was however somewhat embarrassed to have been told by

Mr Fung of recent statements made by British MPs in Hong Kong about the future. These related to a Parliamentary delegation led by Mr Edward Du Cann (along with colleagues such as

Mr Ray Whitney, Mr Bottomley and Mr Willey) which had just

passed through Hong Kong on a visit to China. According to

Mr Fung's report, the MPs had said that the British had been

negotiating for three years with the Chinese about the future

of Hong Kong and that the Chinese were ready to have immediate

talks.

See (192)

271

3. I said to Lord Shepherd that the Lord Privy Seal's advice

still held. It was typical that stories spread from time to

time in Hong Kong. The kind of remarks attributed to the MPs

were just the kind of thing that increased expectations that

the Prime Minister would solve the question of the future of Hong Kong at one blow. It was right therefore to keep Mr Fung

on an even keel.

CONFIDENTIAL

/Lord Shepherd