TNAG-1255-FCO40-1588-Third-countries-and-the-future-of-Hong-Kong-1983 — Page 198

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ESSENTIAL FACTS

SECRET

A.

1.

Future of Hong Kong

The Secretary of State, Lady Young and the PUS are aware of the background to the future of Hong Kong.

2. The second phase of our talks with the Chinese Government will

resume on 22 September through diplomatic channels in Peking. The Portuguese have an interest in this subject given Hong Kong's

proximity to Macao and the economic ties between the two

territories.

B.

3.

Status of Macao

The Portuguese received permission from the Chinese authorities in Canton to establish a settlement in Macao in 1557, but the status of Macao was not clarified legally until 1887 when, by Treaty, the Chinese confirmed the 'perpetual occupation and government of Macao and its dependencies by Portugal as any other Portuguese possession'.

4. The Government of the PRC do not recognise the 1887 treaty. They regard Macao as Chinese territory, occupied by Portugal. Official PRC statements describe Macao as a problem left over from history to be resolved 'when conditions are ripe'. There is no official Chinese representative in Macao.

5. There have been reports of a secret understanding on Macao whereby the Portuguese acknowledged Chinese sovereignty and the

Chinese agreed to continued Portuguese administration. Neither we

nor the US can confirm this. We suspect that an oral and temporary understanding was reached by both sides when diplomatic relations

were established in 1979. This was implied by the Governor of Macao in a recent conversation with the Governor of Hong Kong.

6. The 'Statute of the Territory of Macao', embodied in the Portuguese constitution, provides for enjoyment by Macao of 'administrative, economic, financial and legislative autonomy'.

SECRET