TNAG-1172-FCO40-1453-Future-of-Hong-Kong-1982 — Page 34

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DOUBTFUL ABOUT A SPECIAL TALK WITH LIAO CHENGZHI. A PROPOSAL

BY YOU TO SEE THE MAN DIRECTLY RESPONSIBLE FOR HONG KONG AND

MACAO COULD BE TAKEN BY THE CHINESE AS OPENING A CHANNEL FOR

PRELIMINARY NEGOTIATION AND IT WOULD BE VERY DIFFICULT TO AVOID

THE QUESTION OF SOVEREIGNTY COMING UP.

I

4. WE THINK THAT THE NEXT MAIN CONTACT WITH THE CHINESE

SHOULD BE MADE WHEN PERCY CRADOCK RETURNS TO PEKING AT THE END

OF AUGUST, IN A DISCUSSION OF THE PRIME MINISTER'S AGENDA.

NO APPROACH SHOULD BE NECESSARY BEFORE THAT. IN PARTICULAR,

DOUBT THE NEED FOR ANY FORMAL ACKNOWLEDGEMENT OF DENG XIAOPING'S

REMARKS TO MR HEATH. ALTHOUGH THE LATTER UNDERTOOK TO PASS

THESE ON, THEY WERE NOT A GOVERNMENT-TO-GOVERNMENT COMMUNICATION

AND IT WOULD BE WRONG TO GIVE THE CHINESE THE IDEA THAT WE WERE

TREATING THEM AS SUCH. THE CHINESE EMBASSY HERE ARE AWARE THAT

THE SIGNAL WAS CONVEYED TO US.

5.

ON YOUR TELNO 648, WE AGREE WITH YOUR GENERAL TACTICAL APPROACH AS QUALIFIED BY THE POINT IN PARAGRAPH 9 OF PEKING TUR. 6. I APPRECIATE THAT THIS LEAVES THE QUESTION OF HOW THE

CHINESE MIGHT BE BETTER EDUCATED ABOUT THE ECONOMIC REALITIES

AND THE NEED FOR BRITISH ADMINISTRATION. GIVEN THE PROBLEMS

IN ANY CONTACTS BY OFFICIALS I SEE NO ALTERNATIVE TO KEEPING

IN TOUCH WITH THOSE HONG KONG CHINESE PERSONALITIES WHOM THE

CHINESE GOVERNMENT ARE CONSULTING. I REALISE THE LIMITATIONS AND

THE DIFFICULTY OF GETTING THEM TO SAY THE RIGHT THING. IS THERE

ANY SCOPE FOR BRIEFING SENSIBLE INDIVIDUALS TO MAKE THEIR OWN

APPROACHES (EG Y K KAN, Q W LEE)? CAN ANYTHING BE DONE IN THE

FORM OF AN ANSWER TO THE PROPOSALS BY DICK LEE (NOW PUBLISHED IN

THE FINANCIAL TIMES (FCO TELNO 466))?

PYM

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DISTRIBUTION:-

LIMITED

HKGD

FED

PUSD

PS

PS/LORD BELSTEAD

PS/PUS

MR GIFFARD

MR DONALD

COPIES TO:-

MR BURROWS LEGAL ADVISERS

SIR I SINCLAIR

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