SECRET
SECRETARY OF STATE'S MEETING WITH THE RT HON EDWARD HEATH MP :
30 JUNE 1982 AT 3 PM
FUTURE OF HONG
POINTS TO MAKE
1.
Sorry not to have had chance to see you again sooner. Know
that Mr Clift gave some background to your Private Secretary
last month.
2. Very grateful for report of discussions with Deng Xiaoping.
Important amplification of Chinese position.
3. Chinese obviously demand recognition of sovereignty over
whole territory. This in itself would be a very big move on
our part. But our impression that they may go further. While
Chines
allowing autonomy to Hong Kong, Some(leaders probably still
see it as operating within China and fall short of conceding
that British administration should continue. Do you agree that that mes be their position?
4. But in our view quite impossible for confidence to be
maintained without British administration and without fully
convertible Hong Kong currency. Not sure that the Chinese under-
stand this. What do you think?
5. How much do you see Deng's line as an opening position?
Did he show flexibility?
6.
We, like the Chinese, are giving much thought to the problem.
But Ministers' preoccupation with Falklands makes it impossible
LBU
to take decisions on major questions of this sort. Therefore]
should not go back with response to Chinese right away.
Wrong
to hurry them anyway.
SECRET
17.
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