CONFIDENT IAL
(reported in Peking Review, 18 April 1983).
d.
Xiang Nan, First Party Secretary for Fujian Province, told a reporter of the Hong Kong Ming Pao, on 19 April: 'The question of sovereignty over Hong Kong is not negotiable; as for the question of maintaining Hong Kong's prosperity after China recovered sovereignty, China might study this together with Hong Kong residents, the British authorities and foreign investors in Hong Kong. Hong Kong must remain an international financial centre and free market. China would have to listen to opinions from all quarters with regard to this question. Because of Hong Kong's special characteristics, the proposal for a special administrative region is a good one'.
e. Zhang Wenjin, the Chinese Ambassador to the United States,
in an interview with a Hong Kong journalist in New York on 26 April 1983 said that China hoped for British cooperation in accordance with the principle of preserving Hong Kong's prosperity and stability, in return for which China would guarantee the economic interests of Britain and other countries in Hong Kong.
f. On 27 April Liao Chengzhi told visiting bankers from Hong Kong that China set store by its good relations with Britain and that her actions would have the intention of improving 'this friendly relation- ship'.
He expressed the view that the weakness of the Hong Kong dollar would not last long.
May 1983
a.
Xi Zhongxun, at a meeting with Unofficial Members of the Executive and Legislative Councils (UMELCO) in May said that the issue of sovereignty was non-negotiable, but after China resumed sovereignty she would not change the capitalist system. He said that Hong Kong's economic recession was temporary; 'If people have no confidence and leave, they can go. As long as we maintain the system both the money and the people will come back ... We won't do or say anything to harm stability and prosperity'. (Xinhua did not publish any report on the Umelco delegation.)
b. According to the Hong Kong Economic Journal and Hsin Pao of 30 June and the July issue of the Hsin Pao Finance and Trade Monthly, Xi Zhongxun on 19 May told the 'youth delegation' led by Lee Peng-fei: 'As long as its institutions remain unchanged Hong Kong will continue to prosper. Hong Kong's economic depression will not last long. There is no need to worry just because a few people have left. If they lack confidence they can leave. They can return in the future
We will You can have never carry out transformation as we did in the 1950s .... two homes, one in Hong Kong and one abroad. We guarantee that we will keep everything in Hong Kong as it is at present .... Freedom in life will remain unchanged
Of course it is impossible to have absolute freedom'. Xi added that China was not dependent on Hong Kong for the success of the 'four modernisations, but Hong Kong depended on China for the supply of materials'.
C.
According to News Week magazine and the Hong Kong Hsin Pao (27 June), Hu Yaobang (CCP General Secretary) told the American professor Parris Chang on 24 May that Deng Xiaoping had said to
8
CONFIDENTIAL
/Mrs Thatcher
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