TNAG-1253-FCO40-1586-Third-countries-and-the-future-of-Hong-Kong-1983 — Page 114

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GR 550

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FM HONG KONG 05094OZ JUL 83

TO IMMEDIATE FCO

TELEGRAM NUMBER 953 OF 5 JULY

INFO IMMEDIATE PEKING CANBERRA

NIKKOTO/S OF COPY

RASEIVED AN ART

- 7 JUL 1983

DESK OF

INDEX

PA

REGISTRY Action Taken

See (192

(91)

YOUR TELNO 587: VISIT TO HONG KONG DY NUOTKALTAN TØRETEN MINISTER

1. MR HAYDEN CALLED ON ME ON 4 JULY. HE WAS ACCOMPANIED BY PARSONS, BURNS AND THE AUSTRALIAN COMMISSIONER (NEITHER NUTTER NOR ARGALL CAME TO HONG KONG - CANBERRA TELNO 322 REFERS). THE FINANCIAL SECRETARY AND THE POLITICAL ADVISER WERE ALSO PRESENT.

2. IN RAISING THE QUESTION OF THE FUTURE MR HAYDEN MADE IT CLEAR THAT HE WAS MAINLY CONCERNED ABOUT THE POTENTIAL IMMIGRATION

PROBLEMS FOR AUSTRALIA IF THINGS WENT WRONG IN HONG KONG. HE MADE LITTLE REFERENCE TO AUSTRALIA'S ECONOMIC INTERESTS HERE. I RECALLED THE BRIEFING HE HAD ALREADY BEEN GIVEN (FCO TELNO 215 TO CANBERRA) AND MADE THE ADDITIONAL POINT THAT THE 1 JULY ANNOUNCEMENT MEANT THAT BOTH SIDES WERE NOW READY FOR MORE SUBSTANTIVE DISCUSSION. IN RESPONSE TO HIS QUESTIONS, THAT THE CHINESE HAD BEEN SPREADING KNOWLEDGE OF THEIR OWN PLAN AND THAT THIS HAD CAUSED UNEASE IN HONG KONG. HONG KONG PEOPLE DID NOT TRUST THE PROMISES MADE BY THE GOVERNMENT OF THE PRC AND THERE WAS THEREFORE A NEED, IN ANY ARRANGEMENTS MADE FOR HONG KONG'S ADMINISTRATION BEYOND 1997, FOR HONG KONG TO BE INSULATED FROM CHINESE INTERFERENCE.

EXPLAINED

3. MR HAYDEN ASKED HOW WE ENVISAGED THE QUOTE TRANSITION UNQUOTE WOULD TAKE PLACE. I SAID THAT WE WERE NOT THINKING IN TERMS OF TRANSITION. WE SAW NO SATISFACTORY WAY OF GUARANTEEING THE PRESERVATION OF THE SYSTEMS NOW IN FORCE IN HONG KONG WITHOUT SOME CONTINUING ADMINISTRATIVE ROLE FOR BRITAIN. WHATEVER THE CHINESE LEADERSHIP SAID, IF ULTIMATE POLITICAL AUTHORITY LAY WITH CHINA, HONG KONG PEOPLE WOULD NOT BELIEVE THAT CHINESE OFFICIALS WOULD REFRAIN FROM INTERFERING IN HONG KONG'S AFFAIRS TO AN UNACCEPTABLE

DEGREE. I ADDED THAT ONE OF THE PROBLEMS WAS THAT WHILE THE SENIOR CHINESE LEADERSHIP WISHED TO PRESERVE HONG KONG'S CAPITALIST SYSTEM

THEY DID NOT UNDERSTAND HOW IT WORKED AND THE VITAL PART PLAYED BY CONFIDENCE. MUCH EDUCATION WOULD THEREFORE BE REQUIRED.

4. MR HAYDEN SAID THAT HE HAD HAD SEVERAL CONVERSATIONS WITH THE CHINESE FOREIGN MINISTER, WU XUEQIAN, IN THE MARGINS OF PREMIER ZHAO ZIYANG'S VISIT TO AUSTRALIA. WU HAD SAID VERY FIRMLY THAT THE

CHINESE GOVERNMENT WISHED HONG KONG TO CONTINUE AS A FREE MARKET ECONOMY WITH ITS OWN CURRENCY AND ITS OWN ADMINISTRATION SEPARATE

FROM THAT OF CHINA. CHINA WISHED TO GIVE FIRM GUARANTEES

IN THIS RESPECT. MR HAYDEN ADDED THAT HE WOULD BE VISITING CHINA WITHIN THE NEXT FEW WEEKS (WU XUEQIAN HAD APPARENTLY BEEN SENDING REPEATED MESSAGES PRESSING HIM TO COME). HE EXPECTED TO DISCUSS HONG KONG AGAIN WITH WU.

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See (194)

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