TNAG-1253-FCO40-1586-Third-countries-and-the-future-of-Hong-Kong-1983 — Page 65

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FM WASHINGTON 150341Z JUL 63

TO PRIORITY FCO

TELEGRAM NUMBER 1991 OF 15 JULY INFO PEKING HONG KONG (PERSONAL)

YOUR TALKS WITH SHULTZ: HONG KONG

1. YOU EXPLAINED TO SHULTZ THAT OUR TALKS WITH THE CHINESE

HAD NOW ENTERED THE SECOND PHASE. THEY WERE BOUND TO BE DIFFICULT. THE CHINESE PRINCIPAL PREOCCUPATION WAS SOVEREIGNTY, BUT THEY NOW HAD SOME UNDERSTANDING OF WHAT IT WAS THAT CREATED CONFIDENCE IN HONG KONG AND ENABLED THE PLACE TO TICK. SHULTZ ENDORSED THAT VIEW. HE CITED A CORPORATE LAW CASE IN THE UNITED STATES INVOLVING CHINA IN WHICH THE CHINESE HAD NOT BEGUN TO COMPREHEND HOW THINGS SHOULD BE MANAGED.

2. YOU EMPHASISED TO SHULTZ THE NEED FOR CONFIDENTIALITY IN OUR DISCUSSIONS WITH THE CHINESE, SAYING THAT WE LOOKED TO THE US FOR COMPLETE DISCRETION.

खरिह

WRIGHT

THIS TELEGRAM WAS NOT ADVANCED

FUTURE OF HONG KONG

LIMITED

HKD

ED/FED HD NAD ED/PLANNING STAFF

MR BURROWS

MR MARTIN

FD/PUSD

PS

MR FLOWER

PS/LADY YOUNG

PSAR LUCE

PS/PUS

SIR J BULLARD

MR GIFFARD

MR COLES

COPIES TO:

SIR I SINCLAIR LEGAL ADVISER

LEGAL ADVISERS

ASSESSMENTS STAFF CABINET OFFICE

PUSD

NO 10 DOWNING ST

SIR A PARSONS

MR WALKER,

MR ROBERTS

RESEARCH DEFT (40995)

NEWS D

MR DONALD

MR WRIGHT

CONFIDENTIAL