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281
DE
1947- FG
1.86
4.
Hong Kong tel No 529 explains the circumstances in which Huan
made his remarks and contains one or two amendments.
Comment
Peking tel No 293 and Hong Kong tel No 543 contain the comments
of HM Ambassador Peking and the Governor, Hong Kong.
Assessment
6. Deng Xiaoping's remarks to Mr Heath on 6 April have already
indicated that the Chinese envisage Hong Kong as an autonomous region
within the Chinese state, with more than cosmetic limits on
British administration. (Peking telegrams 202 and 209). Huan Xiang's
remarks are not inconsistent with an extreme interpretation
of Deng's . But they do stretch the Chinese leaders' line pretty far
and contain a number of elements which go well beyond the nine-point
programme for Taiwan on which the Chinese have so far placed so much
emphasis.
7.
This raises the question whether Huan has been accurately
reported by the Australians. The latter have said that he did not
take the initiative but made the remarks over a period in conversation
with his escorting officer. The latter, Mr Rowe, is a sensible and
experienced China expert. He should not have misunderstood what
Huan was saying. But, as Sir E Youde has pointed out in Hong Kong
tel No 543, if asked direct questions it may be difficult for a
Chinese official to return other than a restrictive answer. As well
as the general question about continuing British administration,
this consideration could apply for instance to the remarks about the
Stock Exchange. Given Chinese leaders' emphasis on the importance
of Hong Kong as a commercial centre, it would be very surprising
indeed if Huan had implied that the Stock Exchange might not continue
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