TNAG-1248-FCO40-1562-Press-reports-on-the-future-of-Hong-Kong-1983 — Page 156

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FM HONG KONG 301002Z JUN 83

TO IMMEDIATE F C O

TELEGRAM NUMBER 915 OF 30 JUNE

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MKK040/2

- 4 JUL 1983

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INFO IMMEDIATE HONG KONG GOVERNMENT OFFICE LONDON, PEKING, HONG KONG GOVERNMENT REPRESENTATIVES IN WASHINGTON, NEW YORK, GENEVA AND

BRUSSELS

-YOUR TELNO 580 FUTURE OF HONG KONG FAR EASTERN ECONOMIC

REVIEW STORY

THE ARTICLE REFERRED TO IN TUR HAS NOW APPEARED, WRITTEN BY THE EDITOR DEREK DAVIES AND MARY LEE (WHO WAS A MEMBER OF THE YOUNG PROFESSIONALS DELEGATION TO PEKING). FULL TEXT IS BEING SENT BY FACSIMILE TO HKD VIA THE LONDON OFFICE. THE MAIN POINTS IN THE ARTICLE ARE AS FOLLOWS:

A) SUBSTANTIVE NEGOTIATIONS HAVE BEGUN. A JOINT STATEMENT INDICATING THAT REAL TALKS ARE UNDER WAY IS IMMINENT.

B) THE DEADLOCK WAS BROKEN BY A LETTER FROM THE PRIME MINISTER TO DENG XIAOPING IN WHICH MRS. THATCHER INDIRECTLY ACKNOWLEDGED THAT HONG KONG ISLAND AND KOWLOON COULD NOT EXIST WITHOUT THE NEW TERRITORIES AND HAS THEREFORE INDIRECTLY ACKNOWLEDGED CHINA'S SOVEREIGNTY.

C) ALL PROPOSALS HAD THUS FAR COME FROM THE CHINESE SIDE. ADVICE FROM EXCO WAS AWAITED BEFORE BRITISH PROPOSALS WOULD BE MADE. D) EXCO COULD PROVE A STUMBLING BLOCK TO PROGRESS BUT WERE LIKELY TO AGREE THAT CONCRETE EXCHANGES WERE BETTER THAN

DEADLOCK.

2. NO SOURCES ARE CLAIMED FOR THE STORY. BUT DEREK DAVIES HAS RECENTLY RETURNED FROM AN EXTENDED VISIT TO LONDON. WE HAVE HEARD FROM MARY LEE THAT XI ZHONGXUN TOLD HER WHEN SHE WAS IN PEKING WITH THE YOUNG PROFESSIONALS THAT THERE WAS A LETTER FROM THE PRIME MINISTER BUT GAVE NO (NO) DETAILS. IN RESPONSE TO PRESS ENQUIRIES, THE GOVERNMENT SPOKESMAN HAS SAID THAT THE TALKS ARE CONFIDENTIAL AND THAT WE DO NOT COMMENT ON SPECULATIVE STORIES.

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