TNAG-1232-FCO40-1545-Visit-by-Edward-Heath-MP-to-China-and-Hong-Kong--August-Sept-1983 — Page 15

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FUTURE OF HONG KONG: MR HEATH'S MEETING WITH UMELCO

1. Hong Kong telnos 1344, 1351 and 1352 report on the row at Mr Heath's meeting with the Hong Kong unofficials on 12 September.

2. It is clear that Sir S Y Chung reacted very badly against Mr Heath's remarks, some of which were certainly provocative by Hong Kong standards. This is extremely unfortunate. It will obviously have made the atmosphere at the Governor's meeting with EXCO today more difficult (Hong Kong telno 1356).

3.

Hong Kong telno 1352 says that so far nothing has appeared in the press. However, we have been told by the HKGO that the Far Eastern Economic Review has just issued a press release giving advance notice of points to be covered in their next week's issue. These are:

(a) Mr Heath's row with UMELCO;

(b) A report that Mr R M Evans is to be the next Ambassador

in Peking;

(c) An assessment of HMG's present line saying that our

negotiators are under instructions to hold to a tough position for the time being.

4. In the circumstances all of these points will need to be dealt with by 'no comment' if News Department are approached. But there is no doubt that the revelation of Mr Heath's dis- cussion with UMELCO will hit confidence still further. already very shaky. The Hong Kong dollar fell 10.5 cents today to 7.89 to the US$. There is no sign of the Chinese rei-ning back on their own propaganda. Indeed, the HKGO have had a report that an 'NCNA spokesman' in Hong Kong has criticised the British authorities for their irresponsible attitude to the plight of the dollar. If true, such action by a Chinese 'spokesman' is at the least unusual. and suggests a stepping up of their propaganda pressure.

Dip

14 September 1983

R D Clift

Hong Kong Department

струб

Since writing this I have received a copy of a FEER article

SECRET

which does mention all three prints

Binila

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