TNAG-1173-FCO40-1465-Future-of-Hong-Kong-special-study-by-FCO-for-the-Prime-Minis-1982 — Page 264

23

GRS 500

SECRET

SECRET

FM HONG KONG 261017Z AUG 82

TO IMMEDIATE FCO

TELEGRAM NUMBER 936 OF 26 AUGUST

FOLLOWING PERSONAL FOR CLIFT (HKGD).

YOURTELNO 645.

STUDY OF HONG KONG : ANNEXES.

ว

HITK 040/3.

I HAVE A GENERAL COMMENT ON THE TEXT OF ALL THE ANNEXES WHICH I CAN ILLUSTRATE BY REFERENCE TO THE ANNEX ON TRADE (ANNEX G) WHICH IT SEEMS TO ME OUGHT TO BE COMPLETELY REWRITTEN.

2. AS I UNDERSTAND IT THE ANNEXES ARE DESIGNED PRIMARILY TO EXAMINE WHETHER, IF WE HAD TO AGREE TO A RECOGNITION OF CHINESE SOVEREIGNTY AND TO CONTINUE TO ADMINISTER HONG KONG UNDER A MANAGEMENT CONTRACT, THAT IN ITSELF WOULD REQUIRE ANY CHANGES IN THE PRESENT POSITION, CONSTITUTIONALLY LEGALLY OR ADMINISTRATIVELY. IN THIS EXAMINATION WE WOULD KEEP IN MIND THAT HMG'S OBJECTIVE WOULD BE TO RETAIN THE EXISTING POSITION IN HONG KONG WITHOUT MODIFICATION AS FAR AS POSSIBLE SINCE THE RETENTION OF THE STATUS QUO IN ALL ITS SUBSTANTIAL ASPECTS WOULD BE THE BEST FOR CONFIDENCE. 3. THE FIRST PURPOSE OF EACH ANNEX OUGHT THEREFORE BE TO SAY, AFTER SETTING OUT THE PRESENT POSITION FACTUALLY WHETHER THE PRESENT POSITION COULD BE MAINTAINED OR WHETHER WE WOULD HAVE NO ALTERNATIVE BUT TO MAKE SOME CHANGE.

4. THE SECOND SECTION WOULD SAY WHETHER, IF HONG KONG WAS CLASSIFIED BY CHINA AS AN SAR, THAT WOULD IN ITSELF CALL FOR ANY FURTHER CHANGE. ONLY IN A THIRD SHORT SECTION NEED WE CONSIDER AT THIS STAGE WHAT THE CHINESE MIGHT ASK FOR AND WHAT WE MIGHT BE ABLE TO DO TO MEET IT.

5. THE ANNEX ON TRADE DOES NOT DO THIS. IT OUGHT TO EXAMINE WHETHER THERE WOULD BE ANY INSUPERABLE OBSTACLE TO HMG ARRANGING FOR HONG KONG AS A BRITISH ADMINISTERED TERRITORY UNDER THE MANAGEMENT CONTRACT TO CONTINUE TO ENJOY ITS PRESENT ACCESS TO EXTERNAL MARKETS WHICH IT DERIVES FROM BRITISH MEMBERSHIP OF GATT. THE NEXT SECTION COULD CONSIDER WHETHER THIS POSITION WOULD BE AFFECTED BY THE CHINESE DESIGNATING HONG KONG AS AN SAR. THE NEXT SECTION MIGHT NOTE THAT THE CHINESE MIGHT SEEK TO SHARE IN THE BENEFIT BUT THE COMMENT SHOULD BE THAT IT WOULD BE ESSENTIAL NOT TO PREJUDICE HONG KONG'S ACCESS TO WORLD MARKETS UNDER GATT IN ANY MANAGEMENT CONTRACT MADE WITH THE CHINESE BECAUSE THIS ACCESS IS CRUCIAL TO THE ECONOMIC WELLBEING OF THE TERRITORY WHICH IT IS IN HMG'S INTERESTS, AS WELL AS THOSE OF THE CHINESE, TO MAINTAIN. 6. THE OTHER ANNEXES SEEM TO MEET THE SPECIFICATION IN VARYING DEGREES: AND IT WOULD BE WORTH REVIEWING THE STRUCTURE IN EACH CASE AGAINST THE SAME TEST.

YOUDE

MINIMAL

Año 619

HD/HK OG D

COPIES TO

SECRET MR RUSHFORD LEGAL ADVISER,