TNAG-1172-FCO40-1453-Future-of-Hong-Kong-1982 — Page 102

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GR 330 SECRET

FM PEKING 160631Z JUN 82

TO ROUTINE FCO

TELEGRAM NUMBER 340 OF 16 JUNE

SECRET

мен скор

INFO ROUTINE HONG KONG (PERSONAL FOR GOVERNOR)

313

MY TELNO 318: FUTURE OF HONG KONG

col. Res/2216

1. AT LUNCH ON 15 JUNE, HUAN XIANG WAS NOT VERY COMMUNICATIVE. HE SAID THAT HIS TRIP TO HONG KONG HAD BEEN VALUABLE, AND SPOKE OF HONG KONG'S ROLE AS A TRADE AND FINANCE CENTRE. THE HONG KONG AUTHORITIES HAD SPOKEN TO HIM OF THE NEED FOR CONTINUITY. HE AGREED WITH THAT. HIS ACADEMY WAS STUDYING THE QUESTION OF HONG KONG'S FUTURE.

2. 1 SPOKE OF THE VALUE TO BOTH SIDES OF HONG KONG'S CONTINUING PROSPERITY. WHATEVER WAS TO HAPPEN AFTER 1997, WE SHOULD TAKE GREAT CARE NOT TO KILL THE GOOSE THAT LAID THE GOLDEN EGGS. AS I PERSONALLY SAW IT, ANY SUCCESSFUL ARRANGEMENTS FOR HONG KONG'S FUTURE, REQUIRED INTER ALIA A CONVERTIBLE INTERNATIONALLY ACCEPTABLE CURRENCY, A FABRIC OF LAWS AND INTERNATIONAL AGREEMENTS WHICH WOULD ENABLE THE HONG KONG ECONOMY TO CONTINUE TO FUNCTION AS IT DOES NOW, AND A SENSE OF STABILITY AND CONTINUITY. HUAN DID NOT DEMUR FROM ANY OF THIS AND ADMITTED THAT FEW CHINESE LEADERS UNDERSTOOD HOW HONG KONG WORKED. IT WAS IMPORTANT TO STUDY THE FACTS., VISITS WERE USEFUL.

3. 1 EXPRESSED A GENERAL CAUTION ABOUT THE NEED TO CONFINE OUR EXCHANGES OF IDEAS TO THE TWO SIDES' CONFIDENTIAL OFFICIAL CHANNELS, LEAKS COULD DO GREAT HARM TO CONFIDENCE IN HONG KONG AND TO BOTH OUR INTERESTS. HUAN LOOKED RATHER ABASHED. I THINK HE REALISED WHAT WAS MEANT.

See 403, (403)

4. HUAN SAID LITTLE OF SUBSTANCE, BUT GAVE THE IMPRESSION NOT ONLY THAT THE QUESTION OF HONG KONG WAS UNDER ACTIVE STUDY, BUT ALSO THAT CHINESE IDEAS WERE NOT YET SET. HE SEEMED TO BE AWARE BOTH OF THE DEGREE OF CURRENT INTEREST IN THE FUTURE IN HONG KONG AND OF THE EXPECTATIONS WHICH WOULD BE RAISED BY THE PRIME MINISTER'S VISIT (THOUGH HE CAUTIONED THAT THERE COULD BE NO FINAL SOLUTION IN SEPTEMBER (EXCLAM)). I FOUND IT A MODERATELY REASSURING TALK. CRADOCK

LIMITE HK-GD

FED

MR DONALD

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