TNAG-1252-FCO40-1585-Third-countries-and-the-future-of-Hong-Kong-1983 — Page 11

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RGIVO) A LISTWY NO. 51 2 6 APR 1983

DORK

ELGIETRY

INDE

Future of Hong Kong

The Australian Commissioner called on me this

CHals

morning at my request. As authorised by the FCO I briefed Mr Horne about the talks with the Chinese over the future and the situation here, sticking closely to the line in paras 2 to 6 of FCO TelNo 121 to Canberra. I stressed that the briefing was the same as was being given by Sir J Mason to the Australian Foreign Minister, and that it was for the Commissioner's personal information only. I added that the Australians were not being asked to say anything to ZHAO Ziyang on HMG's behalf, but we thought that they should be aware of the background in case the subject came up during the Chinese Prime Minister's visit

to Australia.

2.

After thanking me, Mr Horne expressed agreement with our assessment of the current state of confidence here (i.e. that morale had stabilised in recent months but could be easily upset). In the absence of an agreed solution he wondered how long it would be before confidence began to slide. I said that that this was a very difficult

question.

Much depended on the way the Chinese behaved and, on the other hand, on whether there was an early recovery in the US and European economies from which Hong Kong would benefit. That said, we thought that Hong Kong could perhaps wait between one to three years for

an agreement.

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