TNAG-1251-FCO40-1584-Third-countries-and-the-future-of-Hong-Kong-1983 — Page 82

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and prosperity. On the administrative side. you might confirm that there is a lot of uncertainty in Hong Kong about the future. including among American investors who have considerable interests there. You might explain how business confidence is based on trust in continuity of policy. freedom of enterprise. and an absence of outside interference. You might be able to get across that this is what Hong Kong offers at present and that its present system of self-government is tried. tested and internationally recognised. It would be helpful if you could get across that it is this which offers businessmen the guarantee that there will not be sudden changes or restrictions imposed from outside.

On the economic side, the Chinese will certainly be aware how much benefit China gets from Hong Kong for its modernisation policy. What they have perhaps not recognised yet is that this could be lost if there were any change away from the present free market economy based on a fully convertible currency. It would also be helpful therefore if you were able to get across to them the basic point that such a currency which is permitted to float in response to supply and demand, depends ultimately on business confidence in Hong Kong.

Finally, if the Chinese were to raise the question of the UK's interest. you might like to make the point to them that the United Kingdom gets no direct revenue from Hong Kong. The authorities there are free to do as they want with tax revenue and budget surpluses.

You will have your own thoughts on how much of this it might be appropriate to say. and we are content to leave this entirely to your own judgement. But I thought you might find it helpful to have some suggestions from us as a point to start from..

I hope you enjoy your trip and look forward to having an opportunity to hear about it when you get back.

If you have an occasion to meet our Ambassador in Peking. Percy Cradock. and the Governor of Hong Kong. Teddy Youde. please give them my regards. Both are old friends.

مسا

ہیلہ

Oi

Oliver Wright

UK SECRET

لمان