CONFIDENT LAL
/ was that of
valid since Taiwan, unlike Israel, probably doubted its opponent's willingness to use armed force, Mr Lo sounded only half-hearted in his response "they should not be too sure of that". Mr Lo confirmed that the existing Special Economic Zones (he thought there would be no more) as well as the status accorded to them in the new draft constitution were relevant to the long term solution of the Taiwan problem, and also that of Hong Kong and Macao, but could not explain precisely how. China, Taiwan and the United States all agreed that Taiwan was part of China:
it was merely for the United States to act according to that principle. As far as Hong Kong was concerned, the most important question to settle/sovereignty: this need not concern investors. When we pointed out that business confidence was very unpredictable, and that minor factors could have disproportionate consequences, and I referred to the practical problems concerning leases, Mr Lo said that investors had no need to lose confidence and that in fact the Hong Kong market was currently booming: in any case Peking had made it clear that they were ready to discuss these issues with the United Kingdom. We left the subject there.
CC:
D Barrie Esq NAD FCO
P J Williamson Esq HKCD FCO
Mr Wallis
Mr Clements Box 850
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شما
K SULLIVAN Assessments Staff
2
CONFIDENTIAL
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