TNAG-1240-FCO40-1553-Future-of-Hong-Kong-1983 — Page 52

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TELEGRAM NUMBER 807 OF 17 AUG

INFO PRIORITY HONG KONG (PERSONAL FOR ACTING GOVERNOR)

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! S AUG 1983

DEBK OFFICER

INDEX

YOUR TELNO 767 AND HONG KONG TELNO 1194: FUTURE OF HONG KONG: ''ACCEPTABILITY OF PROPOSALS TO THE PEOPLE OF HONG KONG

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1. WE HAVE NOW SEEN THE GOVERNOR'S LETTER OF 5 AUGUST. WE AGREE WITH HIS POINT ABOUT THE CHINESE DIMENSION AND HIS BELIEF THAT WE SHOULD THEREFORE TAKE A CAUTIOUS LINE IN ANSWER TO QUESTIONS, ESPECIALLY QUESTIONS IN PARLIAMENT. THE LINE PROPOSED IN HIS PARAGRAPH 3 SEEMS RIGHT. THE CHINESE WOULD NOT LIKE IT, BUT WE COULD PROBABLY LIVE WITH THEIR REACTION. A MORE POSITIVE LINE COULD, HOWEVER, CAUSE US REAL DIFFICULTIES.

2. WE ALSO AGREE WITH THE AMENDMENTS PROPOSED IN THE GOVERNOR'S

LETTER.

3. OUR ONLY ADDITIONAL COMMENTS ARE:

(A) PARARAPH 5 OF THE PAPER, LINE 6. WE WONDER WHETHER IT IS RIGHT IN THIS CONTEXT TO SAY THAT EXCO'S ATTITUDE HAD BEEN **REALISTIC" AND FLEXIBLE. AS PARA 6 OF THE PAPER SHOWS WE MAY FACE DIFFICULTIES WITH EXCO WHEN AS IS PROBABLE WE FACE THE NEED TO CHANGE OUR STRATEGY, OUR FUNDAMENTAL ASSESSMENT OF THE SITUATION MORE GLOOMY THAT THE IRS. IN OTHER PAPERS WE HAVE REFERRED TO THE LIKELY DISPOSITION AMONG CERTAIN EXCO MEMBERS TO CHOOSE CONFROMTATION AND A COLLAPSE OF CONFIDENCE RATHER THAN YIELD TO CHINESE INTRANSIGENCE. WE KNOW THAT SOME MEMBERS HAVE EVEN CONSIDERED SERIOSLY THE IDEA OF THE UK HANGING ON TO THE CEDED TERRITORIES ALONE AFTER 1997. WE WOULD NOT QUESTION THAT EXCO'S RECORD HAS BEEN GENERALLY VERY GOOD, BUT

IN ORDER NOT TO MISLEAD MINISTERS ABOUT POSSIBLE DIFFICULTIES AHEAD IN CARRYING EXCO WITH US, WE WONDER WHETHER IT WOULD NOT BE BETTER TO FINISH THE SENTENCE AFTER THE WORDS WORKED WELL''. (B) WE AGREE WITH WHAT YOU SAY IN PARA 8 ABOUT A REFERENDUM. NEVERTHELESS IT IS AN OPTION AND AS A LAST RESORT WE MIGHT WISH TO USE IT, OR THE THREAT OF IT, IF THE TALKS WITH THE CHINESE REACHED THE POINT OF BREAKDOWN ON THE QUESTION OF ACCEPTABILITY.

CLARK

REGISTRY

Action Taken

See (79)