TNAG-1169-FCO40-1449-Future-of-Hong-Kong-1982 — Page 123

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SECRET

SECRETARY OF STATE'S MEETING WITH THE PRIME MINISTER ON 2 APRIL:

FUTURE OF HONG KONG

POINTS TO MAKE

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1. Chinese seem at last to be focussing on problem. They need

economic benefits of Hong Kong for foreseeable future. But

political difficulties for them.

2.. Hong Kong also important to UK. Hong Kong adds substance

to our relations with Chinese. Significant trade and capital

investment from UK. Population wants Hong Kong to remain British.

Absorption by China' could lead to huge problems.

look to UK for resettlement.

100,000s would

Also much investment from Allies,

eg US, Australia, Japan. Political significance of Western foot-

hold in Far East. Now only 15 years to 1997. Ever-present risk

of collapse of confidence in Territory increases as time passes.

Solution of problem would be major achievement.

3. Need public assurance from Chinese that Hong Kong will remain

under British administration for foreseeable future.

Continued

British administration likely to be most difficult for Chinese to

agree to accept rather than just tolerate a problem left over from

history. They will expect at least our acknowledgement of Chinese

sovereignty.

4.

Objective during visit to get Chinese to agree to negotiations,

if appropriate, spelling out that these would cover a possible deal

on British administration in return for acknowledgement of Chinese

sovereignty.

5. Can offer no concession on sovereignty without clear under-

standing that it is conditional on continuation of full powers of

British administration.

Can be no question of Chinese participation

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