TNAG-1169-FCO40-1449-Future-of-Hong-Kong-1982 — Page 23

GRS 600

SECRET

SECRET

FM HONG KONG 081843Z APR 82

TO PRIORITY FCO

TELEGRAM NUMBER 328 OF 8 APRIL

INFO PRIORITY PEKING (PERSONAL FOR AMBASSADOR)

186 (94

PERSONAL FOR DONALD/AUSS.

никочен

RECEIVED

198

IN NEX

PEKING TELS NOS 292 AND 209: MR HEATH'S CALL ON DENG XIAOPING:

FUTURE OF HONG KONG.

1. THE AMBBASSADOR WILL PRESUMABLY BE SENDING A FULL RECORD OF THIS

IMPORTANT INTERVIEW. IN THE MEANTIME I SUGGEST THAT IT WOULD BE USEFUL IF SIR E YOUDE COULD OBTAIN MR HEATH'S PERSONAL IMPRESSIONS

DIRECT.

ΤΟ

2. AS SEEN FROM HERE, DENG'S REMARKS ARE CONSISTENT WITH PREVIOUS CHINESE STATEMENTS ABOUT CHINA'S ''GENERAL STAND' ON HONG KONG, AND THE RELEVANCE OF THE 9-POINT TAIWAN PROPOSALS. TO THAT EXTENT THEY SHOULD NOT COME AS A SURPRISE. BUT IT IS DISAPPOINTING THAT THE EFFORTS WHICH WE HAVE MADE, DIRECTLY AND INDIRECTLY, EXPLAIN THE REALITIES OF THE SITUATION HERE SHOULD HAVE HAD SO LITTLE EFFECT. IN THAT CONNECTION IT IS A PITY THAT MR HEATH DID NOT RESPOND TO DENG BY SUGGESTING THAT HE CONSIDERED THE VARIOUS ELEMENTS ON WHICH CONFIDENCE DEPENDS E G AN INTERNATIONALLY ACCEPTED CURRENCY, CONTINUITY AND PREDICTABILITY IN LAW AND ADMINISTRATION, AND OF COURSE ESTABLISHED TRADING ARRANGEMENTS. 3. I NOTE THAT DENG PUT HIS IDEAS IN THE FORM OF A QUESTION TO "). THIS MR HEATH (''HE ASKED WHETHER IT WOULD BE POSSIBLE. SUGGESTS THAT THE IDEAS THEMSELVES ARE NOT YET SET IN CONCRETE. AS AN OPENING BID THEY COULD BE WORSE. WE MUST BUILD ON THE POSITIVE

ELEMENTS IN THEM.

4. ON THE NEGATIVE SIDE, IT IS VERY DIFFICULT TO SEE HOW THE

THE ESSENTIAL CONTINUATION OF ANY KIND OF BRITISH ADMINISTRATION, FEATURE OF WHICH MUST BE THE GOVERNOR'S RESPONSIBILITY TO THE SECRETARY OF STATE, COULD BE RECONCILED WITH DENG'S REMARKS THAT HONG KONG WOULD BE A SPECIAL ADMINISTRATIVE ZONE WITHIN CHINA, WITHA LOCAL GOVERNMENT ''FORMED BY THE INHABITANTS''. 5. AGAINST THIS BACKGROUND I AGREE WITH THE AMBASSADOR THAT AN URGENT EDUCATIVE PROCESS IS NOW REQUIRED. VISITS OF THE KIND SUGGESTED IN PARA 6 OF PEKING TELNO 209 MAYBE OF SOME USE IN THIS CONTEXT, THOUGH THE BANK OF CHINA AND OTHER CHINESE AGENCIES HERE ARE PRESUMABLY REPORTING THE SITUATION AS THEY SEE IT ALREADY.

BUT THE MOST EFFECTIVE CHANNEL IS LIKELY TO BE THE BUSINESSMEN AND OTHER THIRD PARTIES WHO HAVE PRIVILEGED ACCESS TO CHINESE LEADERS IN PEKING. WE MUST CONSIDER CAREFULLY HOW WHAT THEY SAY CAN BEST BE ORCHESTRATED AND CONTROLLED.

6. AS FOR A DIRECT RESPONSE TO DENG, AN ALTERNATIVE TO ACTION IN PEKING WOULD BE FOR THE SECRETARY OF STATE TO SUMMON THE CHINESE AMBASSADOR. I SUGGEST THAT THE OBJECT SHOULD BE TO GET AWAY FROM DENG'S IDEAS ABOUT ADMINISTRATION, AND TO CONCENTRATE ON

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