TNAG-1171-FCO40-1452-Future-of-Hong-Kong-1982 — Page 84

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VIEW OF HIS ACCESS AND INFLUENCE. THEY INDICATE THE STRENGTH

OF POLITICAL FACTORS IN CHINESE THINKING. AT THE LEAST WE

NEED TO BE PREPARED FOR STRONG CHINESE DEMANDS FOR CHANGES IN

HONG KONG'S ADMINISTRATIVE SYSTEM TO DEMONSTRATE (INTERNALLY

AND TO THE WORLD) THAT THEY ARE NOT SIMPLY ENDORSING THE

CONTINUATION OF THE STATUS QUO OR ALLOWING THE RE-ESTABLISHMENT

OF FOREIGN CONCESSIONS ON CHINESE SOIL. WHAT REMAINS UNCLEAR

IS HOW FAR THE ECONOMIC AND PRACTICAL REALITIES WILL WEIGH

AGAINST THIS TENDENCY TO 'PUT POLITICS IN COMMAND', AND

WHETHER THE LEADERSHIP UNDERSTANDS THE ECONOMIC FACTORS AND

ARE DELIBERATELY UNDERPLAYING THEM, PARTLY FOR DOMESTIC

POLITICAL REASONS AND PARTLY IN ORDER TO PRESENT US WITH A

TOUGH NEGOTIATING STANCE.

4. IT WILL OBVIOUSLY BE VERY IMPORTANT TO CONVINCE THE

CHINESE THAT SUCH IDEAS WILL NOT WORK. SO FAR AS HMG ARE

CONCERNED THE PROBLEM REMAINS THAT MINISTERS HAVE NOT YET

ENDORSED A NEGOTIATING POSITION. WE CANNOT YET COUNTER

CHINESE VIEWS OF THIS SORT WITHOUT GETTING DRAWN INTO

OFFICIAL DISCUSSION OF THE QUESTION OF SOVEREIGNTY (MY TELELETTER

OF 17 MAY TO PERCY CRADOCK REFERS).

5. THERE MAY HOWEVER BE MILEAGE IN MORE PRECISELY TARGETTED

BRIEFING OF RELIABLE HONG KONG BUSINESSMEN. IN THE RUN UP TO

THE PM'S VISIT IT IS MORE IMPORTANT FOR SUCH PEOPLE TO TELL

THE CHINESE THAT A BRITISH AUTHORITY (AND NOT JUST A

MERCENARY CIVIL SERVICE) IS NECESSARY, THAN IT IS FOR US

TO GIVE THE IMPRESSION THAT WE WANT TO HANG ON TO THE

COLONY FOR IMPERIALIST OR FINANCIAL REASONS. WE ALSO NEED

TO GET OVER THE POINT THAT A UNIFIED CURRENCY IS NONSENSE

FOR CHINA AND HONG KONG. WE SHOULD WELCOME THE GOVERNOR'S

VIEWS ON THESE POINTS.

PYM

LIMITED HD/HK&GD HD/FED MR DONALD

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