TNAG-1252-FCO40-1585-Third-countries-and-the-future-of-Hong-Kong-1983 — Page 129

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Call by the Atlantic Councif

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2 2MAR 1933

A Group from the Atlantic Council-leaded by

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Ambassador Ulexis Johnson, and accompanied by the US Consul General, called on the Governor on 3 March.

to

2. reach a view on how China would develop during the next ten years, both in terms of US/China relations and China's relations with the free world. The Group would then put a policy paper with recommendations to the US Government. Specifically, the Group was examining first, how China was likely to develop over the next ten years, second, given the US wish to see China develop, what cooperation could be developed between the US and China and, third, how China is likely to develop its policy towards Taiwan, and the effect which this might have on its policy towards Hong Kong.

The Governor said that Hong Kong traditionally had been affected and influenced by what happens in China. The present Chinese government and its policies seemed stable and its modernisation policies were consonant with the rational mood which currently prevailed in China. UK-China relations were very good, both directly and via Hong Kong, and economic relations between Hong Kong and China, particularly Guangdong, continued to improve.

The Ambassador said that the Group wanted t&M 2/4

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On the future, the Governor outlined in general terms the recent history. He said that the Chinese publicity line was that Hong Kong's success was due to China. But Hong Kong was itself very valuable to China. The problem was that many people in Peking did not understand what makes Hong Kong work and a process of education was required. Talks were now in progress to determine a formula for the future and the Governor was confident that a solution would be found which would provide a continuity of life-style in Hong Kong. As regards Taiwan, the Governor thought that this was a bigger problem than Hong Kong for China: it was thus important for the future arrangements for Hong Kong to be successful if Chinese intentions over Taiwan were not to be prejudiced.

The Ambassador asked whether the Chinese leaders would be able to reconcile their own different attitudes towards Hong Kong. The Governor said that the Chinese had done so far the last few decades. Hong Kong was successful both in its own right and in its economic relations with Guangdong and the SEZS. We would continue to maximize the economic benefit of Hong Kong to China. In reply to the Ambassador, the Governor said the SEZ could not be expanded to incorporate Hong Kong: the SEZ concept would never be free enough to be applied to Hong Kong without adverse affects.

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