TNAG-1227-FCO40-1540-Visit-to-the-UK-by-Sir-Edward-Youde--Governor-of-Hong-Kong---1983 — Page 13

5.

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In her letter of 10 March to Premier Zhao Ziyang Mrs Thatcher said that, provided agreement could be reached between the British and Chinese Governments on administrative arrangements which would guarantee the future prosperity and stability of Hong Kong and would be acceptable to the British Parliament and to the people of Hong Kong as well as to the Chinese Government, she would be prepared to recommend to Parliament that sovereignty over the whole of Hong Kong

should revert to China. In the negotiations so far the British side

have made plain their sincere view that a continuation of British

administration is the best and surest basis for the continued

stability and prosperity of Hong Kong and they have presented substantial material in support of this view. Their view has not

changed. However the Chinese Government have taken a different view.

The British Government assume the Chinese Government agree that a confrontation would not serve the common aim of maintaining stability and prosperity in Hong Kong and would be in the interests

of neither side. The future of Hong Kong can be assured only on the basis of a negotiated settlement.

6.

The Chinese Government have in the negotiations so far, in various public statements and in the talks between Foreign Minister Wu and Sir Geoffrey Howe in New York, given some indication of the

kind of regime they envisage for Hong Kong after 1997. The British

Government is particularly interested in those elements which, with

adequate safeguards, might ensure autonomy for the Hong Kong people;

the preservation of their existing freedoms, lifestyle and the legal system; the maintenance of the economic system including the free

convertibility of the Hong Kong dollar; a continuing important role for Britain; and a guarantee that these special arrangements for

Hong Kong would last for at least 50 years.

7. In the circumstances, the Prime Minister proposes, in pursuance of her letter of 10 March, and without prejudice to any final

agreement, that the negotiators on the two sides should discuss what

other effective methods might be devised to maintain the stability and prosperity of Hong Kong and should explore further the Chinese

ideas. Their purpose would be to see whether Britain and China

the could together construct, on the basis of proposals put forward by China, arrangements of lasting value to the people of Hong Kong.

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