TNAG-1251-FCO40-1584-Third-countries-and-the-future-of-Hong-Kong-1983 — Page 9

would not want to see that affected in any way by adopting a position about the political future of Hong Kong. But that said there was still a good deal that could be done to persuade the Japanese to take an optimistic view of things. Apart from the broad position which we adopted in dealing with the Japanese. about Hong Kong and which I described above, there would be much to be said for the Hong Kong authorities developing a more sophisticated line to deal with the specific concerns of Japanese interested either in Hong Kong as a financial centre. or as a home for overseas Japanese investment. In this context, Sir Y K mentioned a list of investors who had decided to undertake new investment in Hong Kong in the coming years. He would be handing this to the Japanese at next month's meeting of the Hong Kong- Japan Businessmen's Conference on 11 March, as a demonstration of confidence elsewhere in the world about Hong Kong's future. The Japanese had in addition let it be known that at next month's Conference they wished to have a session for an informal discus- sion of Hong Kong's future. That would provide an opportunity for Sir Y K and other Hong Kong businessmen present to deploy further economic arguments about the continuing attraction of Hong Kong for the Japanese.

4. Both Cheong-Leen and Dunning added that one of the ways in which they were seeking to convince the Japanese that Hong Kong had a good deal to offer was to demonstrate its economic integra- tion with the Chinese economy. The economic modernisation of China envisaged a specific role for Hong Kong. The area between Hong Kong and Canton was effectively the "back-yard" for Hong Kong business. Japanese who invested in Hong Kong were in effect investing in the future of China as a whole.

5. A member of the Embassy will attend the Hong Kong-Japan Businessmen's Conference as an observer. I will myself be giving a lunch for Sir Y K to meet a number of senior Japanese before the Conference takes place including Okita Saburo, the former Foreign Minister. I will let you know of any new points which emerge then.

Yours ever

J S Whitehead

cc M Elliott Esq, FED, FCO

'

RD Clift Esq, Hong Kong and General Dept, A C GalsworthyEsq, Peking

FCO

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DESK INDEX

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FROM W MORRIS, HKGD, FCO

FILE REFERENCE HKK 040/5 DATED 28 FEBRUARY

5120 - 1

HKK 040/5

2 MAR 1983

6.51

AF/3

FOLLOWING FOR S J GOMERSALL ESQ, WASHINGTON

HONGKONG AND THIRD COUNTRIES

(4-8

57

See

79

1. MANY THANKS FOR YOUR LETTER OF 16 FEBRUARY TO DICK CLIFT,

AND FOR THE USEFUL MATERIAL ON CHINESE NEGOTIATING METHODS

ENCLOSED WITH YOUR LETTER OF 28 JANUARY.

2.

SINCE OUR TELECON OF 24 FEBRUARY WE HAVE OF COURSE SEEN

YOUR TELNO 463 ABOUT THE ATLANTIC COUNCIL DELEGATION TO PEKING.

WE ARE GRATEFUL TO YOU FOR SQUEEZING IN A BRIEFING WITH

WILHEIM BEFORE THE PARTY LEFT, PARTICULARLY AS THEY WILL BE IN

CLOSE CONTACT WITH THE ACADEMY OF SOCIAL SCIENCES WHOSE

DIRECTOR, HUAN XIANG, IS MUCH INVOLVED IN POLICY WORK ON

HONG KONG'S FUTURE. WE LOOK FORWARD TO HEARING HOW THEY GET

ON.

3. ON THE GENERAL QUESTION OF OUR BRIEFING LINE WE ARE NOT

SURE THAT IT NEEDS MUCH IN THE WAY OF UPDATING. THE CHINESE

CONTINUE TO MAKE MANY OF THE SAME OLD POINTS, ALTHOUGH THERE IS

GREATER STRESS NOW ON HONG KONG'S ABILITY TO RUN ITSELF AS A

SPECIAL ADMINISTRATIVE REGION, WITH PEKING KEEPING A HAND ON

THE TILLER. SOME PEOPLE IN HONG KONG ARE TAKEN IN BY CHINA'S

ASSURANCES THAT NOTHING WOULD CHANGE UNDER SUCH A SYSTEM, BUT

THE MAJORITY REMAIN SCEPTICAL AND FIND IT HARD TO BELIEVE THAT

THEIR FREEDOM, LIFE STYLE, ABILITY TO MAKE MONEY ETC WILL NOT BE

SEVERELY CRAMPED. IN ADDITION THE CHINESE STILL DO NOT APPEAR TO

UNDERSTAND THAT IT IS CONFIDENCE IN THE PRESENT ADMINISTRATION AND

EXISTING SYSTEMS WHICH PROVIDES THE BASIS FOR THE HEALTHY

EXISTENCE OF THE HONG KONG DOLLAR. MORE SERIOUS IS THE FACT THAT

MANY PEOPLE IN HONG KONG BELIEVE THAT, WHATEVER THE RIGHTS AND

WRONGS OF THE BASIS OF CONFIDENCE, A SOLUTION ON THE LINES WHICH

THE CHINESE HAVE INDICATED IS INEVITABLE.

1

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