TNAG-1256-FCO40-1589-Third-countries-and-the-future-of-Hong-Kong-1983 — Page 110

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Sovereignty

We are

(x) Chinese and British positions well-known. We fully realise importance of sovereignty to China. not inflexible. Willing to consider any solution acceptable to Britain, China and Hong Kong.

Confidence in Hong Kong

(xi) Underlying state of Hong Kong's economy generally healthy. Cumulative effect of Chinese propaganda campaign is main reason for decline of Hong Kong dollar and of stock market. There is lack of confidence in China's SAR plan for Hong Kong. But Chinese

propaganda has eased off at present. Recent measures taken by Hong Kong Government have helped to stabilise the dollar.

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