TNAG-1252-FCO40-1585-Third-countries-and-the-future-of-Hong-Kong-1983 — Page 92

CONFIDENTIAL

British Embassy

3100 Massachusetts Avenue NW Washington DC 20008

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Telex Domestic USA 89-2370/89-2384

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Telex International 64224(WUI)/248308(RCA)/440015(ITT) Telephone (202) 462-1340

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W Morris Esq

Hong Kong & General Department

FCO

2873

Your reference

Our reference

поборется ник 040 15 04015

Date 23 March 1983

Dear Wanisk.

CSIS SEMINAR ON HONG KONG

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79

28 MAR 1983

ICHRIE

Thank you for your teleletter HKK 040/5 of 11 March and for the useful expanded guidance.

You asked for a report. I duly attended the Seminar as an observer this morning. The participants (list attached) included a number of senior government officials, Congressional staff and businessmen, in addition, slightly to my surprise, to a couple of Taiwanese government officials.

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The main speaker was Ralph Clough, who was one of the members of the Atlantic Council group who called on the Governor in Hong Kong recently. Clough stressed the importance of Hong Kong to the region, to America, and to China. For the latter there were political as well as economic benefits. There was currently no consensus in Hong Kong on what the future arrangements should be, but the Chinese had been saying they would do nothing until 1997, which allowed some time yet for businessmen to make a return, and the panicky reaction of last autumn had subsided. The crux was the maintenance of confidence, for which the three prerequisites were a free and independent currency, the maintenance of the Hong Kong legal system, and a 'disinterested' administration. But it was not easy to see how this could be accommodated with a very firm Chinese position on sovereignty. An experienced NCNA contact with whom he had spoken in Hong Kong had been optimistic, predicting an agreement within two years, no change in the currency or in the legal system, local Chinese taking charge of the administration (how they would be appointed or elected was not clear) and the minimum cosmetic changes eg removal of references to the Crown to make the situation compatible with Chinese sovereignty. Others had been less sanguine, and doubted whether the Chinese could agree to purely nominal sovereignty. It was also doubtful whether Britain would be prepared to act as a caretaker government. Clough thought that if the Chinese took over and things went well in Hong Kong, the Taiwanese would say they were a completely different case, but if things went badly they would say "I told you so".

CONFIDENTIAL

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