TNAG-1171-FCO40-1452-Future-of-Hong-Kong-1982 — Page 38

PP HONG KONG

SECRET

འས

7642 1

3029

GR 250

SECRET

FM FCO 272000Z MAY 82

TO PRIORITY HONG KONG

TELEGRAM NUMBER 402 OF 27 MAY

AND TO ROUTINE PEKING

PERSONAL FOR GOVERNOR

FUTURE OF HONG KONG

RECEIVED

никочен

1.

¡ JUN

INDEX

1. LORD SHEPHERD BROUGHT MR JACK SO TO SEE LORD BELSTEAD TODAY, SO THAT SO COULD GIVE ACCOUNT OF FUNG KING-HEY'S MEETING WITH

ZHAO ZHI-YANG IN PEKING IN MARCH. (APRIL)

2. SO SAID FUNG, WHO HAD SPENT AN HOUR WITH ZHAO, HAD DRAWN TWO MAIN CONCLUSIONS. THE CHINESE HAD MOVED ON FROM 'HEARTS AT EASE'

AND WERE NOW THINKING MORE PRECISELY ABOUT THE PROBLEM OF THE

FUTURE. ZHAO HAD TALKED OF A POSSIBLE AUTONOMOUS ZONE AND CONTINUED BRITISH ADMINISTRATION AND CIVIL SERVICE, WHICH, IN HIS VIEW, APPEARED TO INDICATE CONSIDERABLE SCOPE FOR DISCUSSION. (IT APPEARS THAT ZHAO SPOKE IN SIMILAR TERMS TO THOSE USED BY DENG TO MR HEATH).

Pas 216

see (306)

3. IN ANSWER TO A QUESTION LORD SHEPHERD SAID HE WAS NOT CONVINCED THAT THE CHINESE YET FULLY UNDERSTOOD WHAT WAS REQUIRED TO MAINTAIN CONFIDENCE IN HONG KONG DOLLAR. SO, HOWEVER, THOUGHT THEY WERE

BEGINNING TO.

好。

LORD SHEPHERD SAID HE HAD STRESSED TO HONG KONG BUSINESSMEN, SUCH AS FUNG, LI KA-SHING AND Y K PAO, WHO HAD ACCESS TO CHINESE

LEADERSHIP, THAT THEY SHOULD MAKE IT CLEAR THAT THEY WERE NOT

NEGOTIATING. SO SAID IT WAS HOWEVER CLEAR ZHAO EXPECTED HIS

REMARKS TO BE REPORTED BACK.

5. UNDERSTAND FUNG HAS ALREADY REPORTED TO YOU AND INTENDS TO

DO SO AGAIN BEFORE HE NEXT GOES TO PEKING WHERE HE IS DUE TO

SEE LIAO CHENGZHI ON 12 JUNE.

6. LORD BELSTEAD ENCOURAGED FUNG TO KEEP IN TOUCH WITH YOU.

PYM

DISTR

LIMITED

HKGD

FED

PS

PS/LORD BELSTEAD

PS/PUS

MR GIFFARD

MR DONALD

SECRET

qued to Puss

col 16