his position as an intermediary even though times had changed but he was no longer the only channel. The Governor would prefer a clearer and more authoritative channel of communication with the Chinese but was doubtful if, given the situation in Canton and the delicacy of the relationship, such channel could be set up.
The Governor also told me in strict confidence that the President of Portugal was being pressed by the Chinese to visit Peking. This would raise the delicate issue of whether he should come to Macao. He suspected that the Chinese pressure for the visit was in some way connected with the Hong Kong issue.
The Governor gave it as his personal view that if some way could be found to save the face of Peking on sovereignty they would be ready to compromise on other issues. They needed Hong Kong but no Chinese leader could risk his political position by failing to insist on the "recovery of sovereignty". Once this hurdle were surmounted they would approach other matters practically. He saw the various "plans" which were being floated by Liao Chengzhi as bargaining moves. The Chinese knew that they could not run a place as complex as Hong Kong: but it was essential not to force them into a position where they had explicitly to admit it.
Government House Hong Kong
C.C.
Sir S Y Chung
C.S.
P.A
S(GD)
Governor
CONFIDENTIAL
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