TNAG-1247-FCO40-1561-Press-reports-on-the-future-of-Hong-Kong-1983 — Page 98

RESTRICTED

4. ON THE FURTHER CONDUCT OF THE TALKS, THE ARTICLE SAYS THAT THE

CHINESE SIDE HAS NOT CHOSEN ITS NEGUTIATING TEAM BECAUSE THE TALKS

ARE STILL AT A PRELIMINARY STAGE AND BECAUSE THEY ARE WAITING TO

SEE WHO WILL SUCCEED SIR P CRADOCK WHO IS DUE TO RETIRE IN OCTOBER.

THE GOVERNOR WOULD NOT BE ABLE TO TAKE PART AS A REPRESENTATIVE OF

HONG KONG, BECAUSE THE TALKS ARE BETWEEN THE CHINESE AND BRITISH

GOVERNMENTS.

5. ON THE SELF RULE PROPOSAL, THE SOURCES ARE QUOTED AS SAYING

THAT THE CHINESE GOVERNMENT HOPED THAT HONG KONG CHINESE WOULD

PROGRESSIVELY TAKE OVER THE SENIOR POSITIONS WITHIN THE HONG KONG GOVERNMENT WITHIN SEVEN OR EIGHT YEARS. PROMOTION OF LOCAL CHINESE

INTO THESE POSTS SHOULD BEGIN WITHIN TWO OR THREE YEARS. BY 1997

THE CHINESE FLAG WOULD HAVE REPLACED THE BRITISH FLAG, AND THE

GOVERNOR, THE SECRETARY FOR SECURITY AND THE COMMANDER, BRITISH FORCES WOULD HAVE TO RETURN TO BRITAIN. THE ARTICLE ALSO SUGGESTED

THAT THE CHINESE WISHED THE CHARTERED BANK AND THE HONG KONG AND

SHANGHAI BANK TO CONTINUE ISSUING HONG KONG'S BANKNOTES. IF THEY DID NOT CO-OPERATE, CHINA WOULD CONSIDER INVITING US AND JAPANESE

BANKS TO HELP THE DANK OF CHINA ISSUE LOCAL CURRENCY.

6. IN CONCLUSION, THE SOURCES ARE QUOTED AS SAYING THAT THE LACK OF PROGRESS IN THE TALKS IS DUE TO OBSTACLES RAISED BY BRITAIN. CHINA IS SHOWING ITS CONCERN FOR THE WELL BEING OF HONG KONG PEOPLE BY INVITING A SERIES OF DELEGATIONS TO PEKING TO PRESENT THEIR VIEWS. BRITAIN HAD UNDER-ESTIMATED THE FIRMNESS OF CHINA'S STAND ON SOVEREIGNTY, AND HAD MISTAKENLY THOUGHT THAT SOVEREIGNTY NIGHT BE A BARGAINING COUNTER IN THE NEGOTIATIONS. CHINA WAS CONFIDENT

THAT A SOLUTION WOULD BE FOUND, BUT WOULD NOT BE THE DEMANDEUR, EVEN THOUGH AN EARLY SOLUTION WOULD BE IN HONG KONG'S BEST INTERESTS. THE SOURCES ARE QUOTED AS HAVING SAID QUOTE CHINA IS NOT ARGENTINA AND HONG KONG IS NOT THE FALKLANDS UNQUOTE. THIS IS INTERPRETED AS MEANING THAT CHINA'S POSITION IS BOTH QUOTE REASONABLE AND BACKED BY STRENGTH UNQUOTE (THE ORIGINAL CHINESE INVOLVES A PLAY ON WORDS).

7. FULL TRANSLATION FOLLOWS BY BAG.

YOUDE

FUTURE OF HONG KONG

TAIMUND

HDD/HKGD

HD/FED

HD/PLANNING STAFF ED/PUSD

PS

PS/MR HURD

PS/LORD BELSTEAD PS/PUS

SIR J BULTARD

MR GIFFARD

MR DONALD

2

COPIES TO

SIR I SINCLAIR LEGAL ADVISER MR BURROWS LEGAL ADVISERS

MR ROBERTS NEWS D

MR MARTIN

ASSESSMENTS STAFF

CABINET OFFICE

MR FLOWER PUSD

MR COLES, NOIO DOWNING STREET

RESTRICTED